BUENOS AIRES, Argentina – Argentina’s lower house of parliament narrowly passed a controversial labor reform bill after a marathon 12-hour session, in what is shaping up to be a major victory for President Javier Millay.
The vote took place early Friday morning after a nationwide strike to protest the bill caused widespread factory and business closures.
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“We have taken another step on the path to making Argentina great again,” Gabriel Bornoloni, a lawmaker from Mr. Millei’s party La Libertad Avanza, wrote online after the vote.
The bill establishes new rules governing the relationship between workers and employers. It is expected to become law by the end of the month after the Senate reviews amendments to the version it first passed last week.
Members of La Libertad Avanza argue that the bill would modernize the labor market by making it easier for companies to hire and fire workers, including through limits on severance pay and collective bargaining.
It would also allow employers to extend daily working hours from eight to 12 hours, create a “time bank” to replace paid overtime, and reduce the amount of consecutive vacation days workers can take.
Supporters say the changes are essential to boost productivity, attract foreign investment and curb labor lawsuits.
They also praised new tax incentives for employment and provisions that provide a path to legal registration for Argentina’s large number of undocumented workers.
“We are modernizing our workforce. Javier Millei will give us answers for the millions of Argentines currently engaged in the informal economy,” Bornoloni posted on social media after the vote.
Since the bill was first drafted, business leaders have been divided over its potential effectiveness.
Some warned that it could create a sense of insecurity for employees, including provisions that affect collective bargaining and contract stability.
Some questioned the extent to which it would encourage adoption. Ricardo Diab, president of the Confederation of Argentine Medium Enterprises (CAME), said in an interview with Cadena3 that legislation alone is not enough to create jobs.
“To hire [people]there must be needs, and for there to be needs there must be production and consumption,” he said.
Meanwhile, opposition politicians and trade union activists say the law will strip workers of basic rights.
“Workers were already under pressure and this will only hit them even harder, leaving them little room for bargaining,” Roxana Monzon, a national delegate for the opposition Union por la Patria, told Al Jazeera.
“This will mean job insecurity for workers and will have an even greater impact on the most vulnerable.”
She cited “time banks” as an example of the bill’s problematic proposals.
Instead of requiring paid overtime, the bill would allow employers to later compensate workers for time off, subject to company approval.
Monzon explained that the system is ripe for exploitation because some workers rely on being paid overtime.
“Time banking will particularly impact women because it allows employers to determine the hours women must work, regardless of other responsibilities, such as caregiving, for example,” Monzon said.
worker anxiety
As Argentina’s lower house of representatives debated the bill on Thursday, thousands protested outside Congress in solidarity with a nationwide strike organized by the country’s main labor unions.
Gabriela Quiroz, a 31-year-old elementary school teacher from the Buenos Aires suburb of Villa Soldati, said she was already working two jobs to make ends meet. She described the bill as a “terrible setback.”
“I’m very worried and anxious about what will happen. As a teacher, I work a lot of overtime, and now I won’t be paid in cash,” Quiroz said. “At this rate, I can barely make it until the end of the month, but there are many people like me.”
He added that overtime pay cuts could reduce consumer spending and have broader implications for Argentina’s economy.
“When people don’t have money, it affects everyone,” she says. “If you don’t have money, you don’t shop at local stores, so stores start to suffer. It’s a vicious cycle.”
Quiros was one of thousands of people who braved the heat and lack of public transportation due to the strike to head to parliament.
Due to the general strike, the airport was empty and hundreds of flights were cancelled. Factories and banks were also closed for the day, and hospitals provided only emergency services.
As the demonstrations in Buenos Aires drew to a close in the evening, security forces used water cannon, tear gas and rubber bullets against demonstrators, but violent responses became increasingly common.
thousands of businesses closed
Amid a deep economic recession, Argentina’s labor market is a top concern. This bill attempts to approach this issue from several angles.
Think tanks such as the Argentine Institute for Fiscal Analysis report that hiring new workers is costly for companies and that as many as 40 percent of Argentine workers work in the informal sector without job protection.
This bill provides incentives to address these issues. But analysts say what is needed is a broader look at the country’s economy.
Although Argentina’s economic activity is increasing overall, growth has been uneven. Sectors such as banking and agriculture have improved, but manufacturing and commerce have declined sharply in recent years.
According to the Center for Argentine Political Economy (CEPA), a think tank, more than 20,000 companies with registered employees closed between November 2023 and September 2025, at a rate of about 30 a day.
During the same period, approximately 280,000 workers lost their jobs, CEPA added.
Stagnant salaries have also meant they are struggling to keep up with rising prices for basic goods and services such as food.
“While we are debating employment costs in Congress, many families are having family discussions about whether their children can continue to attend school or whether they need to find some kind of job to pay for rent and food. It all hits home at the weakest link,” Monzon said.
big win
Meanwhile, from a political perspective, analysts say the bill’s passage shows the strength of Milley and her party.
Milley, who was in Washington DC on Thursday, celebrated the bill’s success in a post on X.
“It’s historic. Argentina will be great again,” he wrote, putting a spin on the slogan made famous by US President Donald Trump.
Andres Malamud, a senior researcher at the Institute of Social Sciences at the University of Lisbon, said that for a country like Argentina, which has a highly regulated economy, labor reform is not the most important bill, but it is the most symbolic.
Malamud explained that this is a blow to the historic strength of Argentina’s trade unions, which have long been associated with Peronism, the political movement that has ruled since 1946.
Millay, on the other hand, repudiates Peronism, and his party won a decisive victory over the left-wing Peronist movement in October during Argentina’s midterm elections.
“If the international situation does not worsen and societal patience persists, Milay will accomplish what no president since 1983 has accomplished: rule longer than a non-Peronist and implement more reforms than a Peronist,” Malamud said.
Meanwhile, in Buenos Aires, Susana Amatrudo, 54, a nurse from Avellaneda, told Al Jazeera she was worried the changes would have a ripple effect on society as a whole.
“When factories close and people lose their jobs, it affects everyone. People have less money, they can buy less. This situation has been going on for some time and will get worse,” Amatrudo said with tears in his eyes as he waved a large Argentine flag in front of parliament.
“I’m OK, but I know a lot of people who aren’t. That’s why we need to keep fighting.”
