The Labor Formalization Incentive Regime aims to reduce informality and promote registered employment
The measure aims to reduce non-wage labor costs and create conditions for more companies to formally hire workers. Initial records show that the benefit began to spread among companies of different sizes and economic activities.
The labor reform promoted by the Government of Javier Milei has already achieved its first results in terms of employment formalization.
Between May and August, the Labor Formalization Incentive Regime (RIFL) allowed for the registration of 81,808 workers in the private sector, based on a scheme that reduces employer contributions to encourage companies to hire staff.
The data reflects a growing use of the mechanism since its implementation. In May, 18,914 hires were recorded, a figure that increased to 41,952 in June and reached 63,305 in July. By August, the total reached 81,808 workers, with an additional 18,503 hires during that last month.
The growth was also observed among employers who decided to join the program. The number of benefiting companies increased from 8,024 in May to 25,928 in August, representing approximately 5% of the total private employers in the country. On average, each firm hired 3.2 workers through this modality.
This progress constitutes one of the first indicators of the scope of the labor reform, which was enacted in March and regulated at the end of April. The aim of the regime is to facilitate the entry into registered employment for individuals who were in the informal sector, unemployed, self-employed, and former public sector employees.
The RIFL establishes a reduction in employer contributions during the first 48 months of each hire. The rates were set at 2% for contributions to the Argentine Integrated Pension System (SIPA), Family Allowances, and the National Employment Fund, while a 3% rate was established for the INSSJP (PAMI).
Commerce leads the sectoral distribution, with 20,348 workers hired, accounting for 24.9% of the total. It is followed by business services, with 18,487 people (22.6%), and industry, with 12,031 (14.7%). Together, these three activities account for 62% of the positions reached by the program.
However, when measuring the regime's participation in registered employment for each activity, hotels and restaurants take the lead, with 2.9%. Following are construction, with 2.2%, and business services, with 2%.
Small and medium-sized enterprises also play an important role. Firms with up to 10 employees represent 55.1% of the participating employers, while those with between 11 and 50 workers add another 8,188 establishments. Both segments account for 87% of the companies that utilized the benefit.
In territorial terms, the province of Buenos Aires concentrates the largest number of hires, with 24,406 workers (29.8%). It is followed by Buenos Aires City, with 19,060 (23.3%); Córdoba, with 8,940 (10.9%), and Santa Fe, with 7,431 (9.1%).
Thus, the mechanism promoted by Milei's administration has already managed to incorporate almost 82,000 workers under formal hiring conditions and add nearly 26,000 companies.
