Overview
- Senators Flavia Royón, Alejandra Vigo and Carolina Moisés filed a joint bill Tuesday to scrap Title II of Law 27.802, which created the employer-funded severance account called the Labor Assistance Fund.
- The sponsors say the fund would cut employer payroll contributions and open a revenue gap of about 3.28 trillion pesos, which they argue would strain pensions and shared federal transfers.
- The filing argues the new setup weakens the deterrent effect of severance pay and could drive higher staff turnover, with simulations showing a micro firm needs 6 years and 9 months to build cover that a large company can amass in 2 months.
- A labor-court injunction has already suspended 70 to 80 articles of the reform, including the fund, and the government has appealed through the Human Capital Ministry.
- The senators’ break, tied to pressures from provincial allies, keeps the fight alive in Congress and the courts and leaves employers and workers unsure how dismissals will be financed.