companies cannot pay salaries and ask the government for help

Taking into account that the extension of the mandatory quarantine until mid-April is already a fact, employers demand measures that allow them to pay wages, especially in sectors suffering from a deep recession and slowing sales product of the measures arranged for the social containment of the pandemic.

Businessmen clarify that the number one priority is to take care of health, but they warn that the second concern is to face the payment of wages in the coming months.

When the quarantine was announced, the banks were authorized and in fact went out to guarantee electronic and ATM operations. But 14 days after they have to prove the March wages, the most widespread assumption is that not a few companies will arrive without funds to do so.

For this reason, among the requests, the need for banks to resume even partially their operations to open the bank clearing and the operations with checks, in addition to the suspension and deferral of the payment of taxes, especially Profits, in addition to social charges and employers.

These measures have been demanded from sectors as dispersed as those of the oil industry, food producers, small and medium-sized companies (SMEs), tourism, loggers, the agro-industrial chain and, especially, businesses and businesses related to consumption and gastronomy.

All of them are joined by the “horror” of the economic consequences that the health and social tragedy of the coronavirus is leaving on its way through Argentina and of which all anticipate a regrettable expansion in the coming months.

The first results of the business lobby were revealed with the recent announcement that checks will be cleared again and that the regulations for accounts that issue unsupported checks will be relaxed.

That point was one of the strongest claims in recent days, given that the lack of operations with checks implied distortions: not all companies can operate remotely, such as, for the constitution of fixed terms, the granting of financing and to guarantee services related to the payment system.

“Without the electronic check clearing means that although we can make document deposits there is no impact on the bank accounts, we do not know how long, since now they say that the quarantine will be extended until mid-April, “they explain from one of the largest dairy companies in the country.

Remember that bank clearing is the process of validation and collection of checks carried out by the Clearing House, also known as the Payment Clearing House.

An operation that the executives describe as essential so that the chain of payments is not cut, beyond that, among the measures that the Central Bank has already adopted, is that of guaranteeing the cash provision for banks to adopt all necessary measures, including human resources, to ensure the sufficient provision of funds at ATMs and the continuity of operations related to the withdrawal of cash at non-bank withdrawal points.

In fact, from the Banco Nación itself they defend the decisions of the BCRA and classify as “adequate” the determination of reduce lace bank for release $ 320 billion for 26% loans whose objective is precisely to avoid cutting the payment chain.

Fuel sector, in trouble

It is not the same vision that the executives consulted by iProfessional, for whom the subsistence of both their businesses and to sustain the entire staff will be more and more complicated. This, if the Government does not add new measures to help the business sector to those already reported to assist informal sectors, retirees and people with fewer resources.

From the sector of service stationsFor example, they ask not to pay employer contributions for the next few days as an immediate aid mechanism.

This was reported to the Ministry of Labor from the Confederation of Hydrocarbon Trade Entities of Argentina (CECHA), from where they demand the exemption of contributions from workers, as well as for employer contributions.

Also, pay basic salaries, without additional to attendance, fund management and seniority; the possibility of granting workers early vacations; the postponement of joint negotiations.

In the case of taxes, the requests are directed to the AFIP with the objective of allowing them not to pay the contributions of the workers, as well as employer contributions (in cash, that is, not to pay F931).

With this kind of help, they say, they could avoid suspending activities and continue working, even partially, since the limitations due to quarantine add to the damage caused by the drop in the price of crude oil.

Both CECHA and the Federation of Fuel Entrepreneurs of the Argentine Republic (FECRA) admit to being in negotiations with some banks to enable branches in which the stationers can deposit the cash.

This, for example, is already happening in Mendoza, where the Nation will set up branches for the oil companies deposit money from the collection, mostly from their service station networks.

It will be necessary to see what measure other banks adopt and if the decision is extended to other areas of the country, since the impossibility of cashing checks worryingly complicates the normal operation of service stations.

It is a sector that is largely independent from the large oil companies since 85% of the stations are not owned by companies such as YPF, Shell or Axion, but are companies that every two days must pay the charges received, deposit checks or make bank transfers to the collection accounts of the oil companies.

An operation that today cannot carry out and that forces them to have millions of pesos immobilized Since most of the billing is in cash, they cannot deposit to have the money in their accounts and to be able to make the transfers.

“It is unusual what they did because they cut the payment round, so the first thing they should do is for all banks to reopen for all companies that provide services for those activities that were declared essential,” complain from one of local oil companies.

In one of the most important companies in the gaming business, the concern is also increasing. Sources from one of the groups of bingo halls and casinos that, by official order cannot operate, anticipate that they will be able to pay the full salaries for the month of March. And they clarify that if, as everything indicates, the mandatory isolation is extended they will continue with the same policy if it is for 15 more days. “After continuing we are going to evaluate the suspension of people, but it is something that we will see along the way,” they warn.

Services, at risk of not being able to pay

Another sector that calls for measures is the one that groups real estate and real estate services from where they describe the situation as “unpublished” and anticipate that it will surely require measures never before taken by the government and companies.

“The realities are very different and we are making decisions by reading the day-to-day situation trying not to change business plans,” explains Alejandro Ginevra, president of the Chamber of Real Estate Services Companies (CAMESI).

In the same way they respond in the Argentine Chamber of Shoppings Centers. Its owner, Mario Nirenberg points out that companies, whatever their size, will have serious difficulties in facing wages. “In this sense, we are attentive and expectant to the measures that the Government will take for all the affected sectors and in particular for ours,” added the executive.

It happens that the shopping malls have been closed since last Friday, March 20, when the National Executive Power decreed compulsory social isolation, preventing activities in areas of massive attendance of citizens.

In fact, several brands that have stores in the shopping malls also feel the crisis in a profound way, having their activities slowed down, without sales and with the staff unable to fulfill their tasks.

Similar situation have the warehouses and food houses, which by collecting a large part of their sales in cash, cannot deposit that money in the bank accounts from which they pay their suppliers.

In this sense, from an investment fund that owns important brands of this type they understand as a priority the payment of wages to the personnel of their companies, for which they ask the national authorities to relieve companies of the payment of social security contributions, employer contributions, and thus allow funds to be released to the private sector to meet its personnel.

The sector demands defer payment of rentals, services and rates until a considerable time after the end of the quarantine, in addition to freezing the rate increases until the end of the crisis and canceling the cut of services or the municipal closure for non-payment, as well as expanding the exemption of contributions and employer contributions to all companies that alert about a decrease in their activity level.

They also indicate as a wise decision the enabling of REPRO in general. Through this program, the Ministry of Labor offers to the workers of the companies, whose application has been approved, a fixed monthly remunerative sum of up to an amount equivalent to the minimum, vital and mobile salary per worker updated to the date of grant, for up to 12 months, intended to complete the salary of your job category.

To access this benefit, companies must prove the crisis they are going through, detailing the actions they intend to carry out for their recovery, and commit themselves not to lay off personnel and maintain the total payroll of workers.

Food, on the go and without a box

In the food industry, the picture is similar. This, despite being one of the sectors exempted from quarantine, considering that they must continue to produce to supply the large supermarket chains and all commerce.

However, some of its leaders ask for containment measures, as does Ignacio Noel, owner of Morixe, for whom the Government should assist companies on credit to pay salaries and exempt social security contributions for the duration of the health emergency.

In statements to other media, Noel had already anticipated his company’s strategy to continue meeting its obligations. “The wheat we buy we have to pay with direct transfers to the producer but with the problem that these operations we cover with checks that we are receiving from the supermarkets and the rest of our clients and that we cannot use when the operation is paralyzed, with which we are going to be in difficulties to cover the payments, “he said a few days ago.

Another of his colleagues agrees and hopes that in the coming weeks measures are disclosed for sectors with financial and economic problems such as the flexibility of terms in commitments and direct aid to avoid layoffs.

It happens that, despite being exempted from compulsory quarantine because it is considered an essential activity, manufacturers of consumer products warn that the suspension of bank clearing and check discount will end up hindering the normal supply of food and other products.

The same situation goes through supermarkets, a sector that also collects large sums of cash and is prevented from depositing those funds in its bank accounts to pay its suppliers, wages and basic taxes.

A view that worries the Argentine Industrial Union (UIA), where several of its referents have been requesting that the provision of taxes and contributions be made more flexible, that Justice stop executions and that the requirement of not owing taxes be reviewed in order to be subject to credits for working capital.

“The priority is wages,” say the men of the main industrial chamber in the country, for which they also collude in the need for the operation of the clearing house to collect payments or checks to resume.

“There is no way we can pay salaries if this spreads and the government does not help and on top of that, the compensator and clearing to deposit securities continue to slow down because we are not going to be able to pay and we are going to run out of supplies,” warned a senior industrialist with important position within the UIA.

From the plastic sector they anticipate in this sense that without any official assistance they will only be able to face the payment of salaries for a couple of months using reserve funds.

A scenario shared by producers loggers, from where they glimpse a discouraging panorama when it comes to facing the payment of wages in the sector that, according to their references, has been maintained “with the minimum and indispensable to return to activity once the crisis begins to dissipate.”

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