A Second Postponement for the FAL
The Argentine government has moved the start date of the Labor Assistance Funds (FAL) to December 1, 2026, according to Decree 1228/2026 published this Tuesday in the Official Gazette. The program was originally scheduled to begin on June 1, was later shifted to November 1, and has now been delayed by one more month, staying within the six-month postponement window the Labor Modernization Law allows.[S1][S2][S3][S5]
The decree also changes how long employers must accumulate contributions before drawing on the funds. The minimum waiting period, known as the carencia, rises from six to twelve monthly periods. Counting starts in the calendar month when the Agency for Revenue and Customs Control (ARCA) records the employer's first effective contribution, after which twelve consecutive months of accrual and payment must be completed.[S1][S2][S4][S5]
According to the government, the earlier six-month window did not allow the funds to build a sufficient initial base of resources. Extending it is meant to give the funds enough capital to meet their obligations and preserve their stability. The decree was signed by President Javier Milei, Cabinet Chief Diego Santilli, Human Capital Minister Sandra Pettovello and Economy Minister Luis Caputo, and took effect upon publication.[S1][S2][S5]
Technical Preparations and Market Requests
In its stated grounds, the Executive said procedures and computer systems needed to administer the funds are still being finished. It also pointed to the need for testing to catch and fix possible errors, inconsistencies or delays before the system goes live. The government described the new regime as complex and wide-ranging, arguing that extra time is needed to complete implementation and run the relevant tests.[S1][S2][S4][S5]
The request for more time came through the National Securities Commission (CNV) from industry chambers representing mutual investment funds, trusts and stockbrokers. Among them were the Argentine Chamber of Mutual Investment Funds (CAFCI), the Argentine Chamber of Trusts and Direct Investment Funds in Productive Activities (CAFIDAP) and the Chamber of Stockbrokers (CADAB). These entities asked both for a later start and for a longer initial accumulation period.[S1][S2][S3][S5]
The FAL will operate through open mutual investment funds and financial trusts overseen by the CNV. Launching the system requires coordination among the Economy Ministry, the Labor Secretariat, ARCA and capital-market entities, as well as technology and operations providers. The regime covers private-sector employers, with exceptions set by the Labor Modernization Law; national, provincial, city and municipal public-sector employment relationships are excluded.[S1][S2][S5]
Contribution Rates and How the Funds Work
The FAL is built from monthly employer contributions held in collective investment vehicles authorized and supervised by the CNV, including mutual funds and financial trusts with individual accounts for each employer. Resources may be invested only in financial instruments issued and traded in Argentina. The mechanism was first regulated by Decree 408/2026, and ARCA later issued General Resolution 5907/2026 setting out how employers must declare and pay contributions.[S1][S2][S5]
ARCA's rules set two contribution rates. Micro, small and medium-sized enterprises (MiPyMEs) and nonprofit entities must direct 2.5% of the remuneration used as the base for employer pension contributions to the FAL each month. Other private employers contribute 1%. The FAL payment is not added on top of existing payroll charges; it is deducted from contributions destined for SIPA, PAMI, the National Employment Fund and the Family Allowances Regime, keeping the total burden at 20.40% or 18% depending on employer type.[S1][S3][S4]
To qualify for the 2.5% rate, small and medium-sized businesses must hold a valid MiPyME certificate. Nonprofit entities, including associations, foundations, cooperatives, mutuals, property-owner consortia and religious bodies, must obtain their classification from the Secretariat of Industry, Commerce and Small and Medium Enterprises. The funds are meant to finance severance for dismissal, notice periods and integration, among other concepts under the Labor Contract Law and professional statutes, including the agricultural work regime.[S1][S3][S4]
