Decree 1228/2026: the labor fund grace period increases to twelve months

The National Executive Branch doubled the grace period of the Labor Assistance Funds (FAL) created by Law 27,802 from six to twelve months and postponed the entry into force of the entire regime to December 1, 2026. This was established through Decree 1228/2026, signed by President Milei along with Diego César Santilli, Sandra Pettovello, and Luis Andres Caputo, published in the First Section of the Official Gazette of the Argentine Republic on October 20, 2026.

The instrument modifies Decree No. 408 of May 29, 2026, which had regulated Title II of the Labor Modernization Law No. 27,802 and had set the grace period at a minimum of six monthly periods. The processed file is EX-2026-100721418-APN-CGDTEYS#MCH and the regulation is issued in exercise of the powers of Article 99, subsection 2 of the National Constitution and Articles 65, second paragraph, and 77 of Law No. 27,802.

Twelve full and consecutive periods

Article 1 replaces Article 15 of Decree No. 408/2026 and establishes that the minimum grace period shall be TWELVE (12) monthly periods. The count begins from the calendar month in which the effective integration of the employer’s first contribution to the Fund is registered with the Revenue and Customs Control Agency (ARCA), and covers twelve full and consecutive accrual and payment periods.

In the recitals, the Executive justifies the extension based on the need for the Funds to accumulate sufficient initial assets before meeting obligations derived from the termination of employment relationships. It maintains that the relationship between the contributions effectively integrated and the potential obligations “constitutes a relevant element to preserve its adequate solvency, liquidity, and financial stability,” and that experience and technical requests from the sector demonstrated that the original six-month term was insufficient.

Entry into force moved to December 1

Article 2 replaces Article 27 of Decree No. 408/2026 and extends the entry into force date of the Title II regime to December 1, 2026. Law No. 27,802 had set it for June 1, 2026, and authorized the Executive to extend it by up to six months; Decree No. 408/26 had already moved that date to November 1, 2026.

The decree clarifies that the measure does not alter the substantive objectives of the law, but rather seeks to complete procedures, systems, and IT tools that are still being adapted. Article 3 provides that the regulation governs from the day of its publication in the Official Gazette.

The request from the chambers and the regulatory framework

According to the recitals, the Argentine Chamber of Mutual Funds (CAFCI), the Argentine Chamber of Trusts and Direct Investment Funds in Productive Activities (CAFIDAP), and the Chamber of Stockbrokers (CADAB) requested, through the National Securities Commission (CNV), to extend the validity and expand the grace period. The regime is supported by a set of complementary regulations:

• Ministry of Economy Resolution No. 1276/26, which established the investment policies and eligible assets.
• CNV General Resolution No. 1167/26 and ARCA General Resolution No. 5907/26, containing clarifying and complementary rules.
• Financial Information Unit (UIF) Resolution No. 109/26, which incorporated a specific regulatory treatment for the Funds.
• Mandatory implementation through Open-Ended Mutual Funds and Financial Trusts subject to the jurisdiction of the CNV.

Who is covered

The regime applies to private sector employers. Labor relations mentioned in the last paragraph of Article 58 of Law No. 27,802 and those of the Public Sector, as defined according to Article 8 of Law No. 24,156 and the regulations of provinces, the Autonomous City of Buenos Aires, and municipalities, are excluded. Implementation requires the coordinated action of the Ministry of Economy, the Secretariat of Labor, Employment and Social Security of the Ministry of Human Capital, the CNV, and ARCA.

The impact is twofold for dismissed workers and for companies: the coverage of labor terminations funded by the Funds cannot be activated until each employer completes twelve months of contributions; thus, in practice, the first year of the regime’s operation will pass without available benefits. For employers, meanwhile, the obligation to contribute remains, but the return in terms of coverage is deferred by one more semester compared to the scheme originally regulated in May 2026.

Source: Official Gazette of the Argentine Republic, October 20, 2026, First Section (official reference: Decree 1228/2026, DECTO-2026-1228-APN-PTE).