Argentina: payment of salaries in foreign currency
Earlier this year, Chamber VIII of the National Labor Court declared, in the case “Incidente de Recurso de Queja, Espinoza, Cristian Omar c. Club Atlético Huracan s. despite s. incidente de recurso de queja”, that if an employee’s wages are paid in foreign currency, it is not possible to convert them into Argentine pesos in the event of a claim. Previously, in May 2021, Section V of the Court had already ruled in a similar way in the case “Fernández, Carlos Alberto v. Paradigm Geophysical SA et al. dismissal”.
However, this is not a recent discussion. Labor courts had already dealt with this issue and taken sides on it, albeit in different contexts and economic situations. For example, in 2005, during the period of convertibility, in the case “Segura, Néstor c. Daikin Air Conditioning Argentina SA”, Section X of the Court determined the right of the plaintiff to continue to receive his salary in dollars after the enactment of Law No. 25,561. Similarly, in 2020, in the case of “Sánchez , Jorge José v. GE Oil & Gas Products & Services Argentina SA y otros s/ despido”, Section VI of the Court approved a foreign currency settlement agreement.
However, adopting this method of payment involves certain risks for the employers who choose it. First, labor authorities can claim that payment in foreign currency exceeds the 20% limit allowed for payment in kind. Although the risk of this happening is low, the rationale for the rule being to protect the employee and the dollar is a stronger currency than the Argentine peso; if fines are imposed for such an offence, they will usually not be very large. Secondly, employees who do not receive their salary in a foreign currency can complain of discrimination, in which case the company will have to prove that the distinction/selection is based on objective criteria. In addition, once the benefit is granted, employees will have a vested right to continue to receive payment in dollars so that in the event of resumption of payment in Argentine pesos without their consent, they risk availing themselves of the previous conditions maintained .
Finally, and to reduce the risks mentioned above, we suggest that employees who accept this method of payment send a written letter to their employer requesting payment in foreign currency and providing the details of an account of which they are the owners. exclusive and on which they wish to pour the dollar. the equivalent of their salary to be paid.