In Argentina there are already IT professionals who directly collect their salaries in dollars in foreign accounts. It is an open secret within the industry and, although no company recognizes it directly, several of them are doing it: one of the local unicorns pays 30% of the salary in dollars that some of their employees have abroad. And it is not the only company: there are at least three local firms that are doing something similar, according to this publication.
There are a number of factors to drive payment in dollars: on the one hand, the increases, although the salary is tied to the official dollar, does not cover inflation and, on the other hand, the competitiveness of local salaries must be taken into account with those that are paid abroad. In the words of a project leader who prefers off: « When I see how much he charged in dollars here, I think about working abroad or directly leaving, even if he is charging well for local scales. »
The objective of paying in dollars is clear: to prevent talent from leaving and to strengthen salary competitiveness in key positions such as different software developers (Java, Mobile, Python, Rubi, etc.) as well as those people who are dedicated to data science. « To have competitive salaries, you have to adjust them to international reality, » says Alberto Bethke, CEO and founding partner of Olivia, an Argentine consultancy in Organizational Transformation. « Beyond the legal, from the ethical and moral points of view, what they do is correct » the companies that pay salaries directly abroad.
A spokesperson for a local software developer operating in several countries says that he is having a difficult time finding programmers – he has more than 50 open searches all the time – because he decided not to pay in this way because it gets complicated when « he finds out all the structure « that » the arrangement is for the few. While some big ones do it, he acknowledges, it is much easier for girls, companies of 10 or 20 people.
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A corporate source, also off-site, mentions that there are companies that have been doing something like this since last year and that it is a 100% legal operation in most cases. In fact, it says: « Some people, who went to work last year, received the offer to collect part of their salary in pesos, ‘dollarized’ pesos from the officer or directly in dollars ». The only obstacle, at least from the operational point of view, is to open an account in the United States or another country, but that now is not so complex to do.
Many local companies already pay their « dollarized » salaries at the official exchange rate but, taking into account the exchange gap, this is not enough for those employees who occupy the most required positions in the local IT market. « This is being chosen as a plus for companies to retain talent, » remarks tax expert Iván Sasovsky, co-founder of the S&A accounting firm. « This is the first time that it has happened so massively, » he reinforces.
How the legal payment in dollars works outside the country
The tax expert Jesica Fontana, S&A Audit and Outsourcing Manager, explains it step by step. In the first place, it points out that, from the legal point of view, it is based on the Law employment contract allows payment in kind of 20% of the total salary. This percentage is not higher to protect the labor rights of employees. In case you want to pay the entire salary in an account abroad in foreign currency, the company will have to ask the employee for a written note stating this request.
As the salary payments, according to the regulation, have to be made in a salary account within Argentina, eventually the Ministry of Labor could fine the company that does it but Fontana understands that « it is a lower risk » since there is a note giving conformity and is a clear benefit for the worker. The solution to avoid any risk is that this payment in dollars abroad (or in a local account, if necessary) does not exceed the 20% that the law indicates.
From the tax point of view, remunerations in kind, and in particular these payments in dollars specifically « They will have to be converted at the official exchange rate to enter contributions, contributions from both Social Security and social work and ART and the withholdings of the fourth category -as earnings-« , explains the taxpayer.
Since the exchange issue, this would be uThe income that the worker is receiving abroad, and not an export of services, so the Central Bank’s regulation regarding the pesification of dollars that enter from abroad. Entually, the employee could enter these currencies into the country through the « counted with liqui » to obtain a higher income than what you would get with the official change.
Finally, from a business point of view, what must be taken into account is that the firm has dollars available abroad, in its own accounts or thanks to other companies of the same business group. In the case of a multinational, the outside company deposits the employee, and that generates an « intercompany liability » for the local subsidiary that will then have to return or capitalize, Fontana indicates.
Why it is best to avoid the « gray » tracks
There is a voracity of information on this subject, says Juan Carlos Cerutti, director of Labor Law at Plan A, a study dedicated to labor law. « It is not problematic from the point of view of employment, but the company has to have someone who can compensate it for the money abroad, » as Jesica Fontana explains. « There are some companies that ‘steal’ employees from Argentines and offer to pay them via Invoice E, but that leaves the employee without legal or social coverage. Sometimes, Argentine employees have won lawsuits against companies that carry out these practices, but when you are Faced with ‘swallow capitals’, it is very difficult to face them « , he details.