In Argentina, a recent labor reform project that received preliminary approval in the Senate establishes the Labor Assistance Fund (FAL), aimed at easing and reducing severance payments. This fund will be financed by a mandatory monthly contribution from employers, set at 1% for large companies and 2.5% for small and medium-sized enterprises (SMEs). These contributions are aimed at creating a financial cushion to help manage severance payments in the private sector.

The FAL is designed to complement the existing severance payment regime, rather than replace it, offering businesses a source of financial support when dismissing employees. The fund's resources will be managed by the National Securities Commission, under the oversight of the Ministry of Economy and the Ministry of Human Capital. This structure is intended to ensure that the funds are properly administered while meeting the needs of both employers and employees.

This initiative is a response to ongoing challenges in Argentina's labor market, particularly regarding the costs associated with layoffs, which can be a significant burden for businesses. By creating the FAL, the government aims to strike a balance between offering protection to dismissed workers through indemnities and providing economic relief to employers, thus influencing the overall labor dynamics in the country.