Labor Reform In Chile: An Analysis Of The 40-hour Work Week Legislation

• Published date: 11 July 2023
• Subject Matter: Employment and HR, Employee Benefits & Compensation
• Law Firm: Biz Latin Hub Group
• Author: Mr Craig Dempsey

Chile has been at the forefront of economic progress and innovation in Latin America for many years. Its fast-growing tech sector has led to the country being dubbed "Chilecon Valley" by some industry experts.

Today, there are over 8,000 IT companies in Chile with this number set to increase as the 5G telecommunications network widens.

The Government's progressive policy continues with the new labor reform in Chile. In early April, Chile's congress overwhelmingly passed a bill reducing the country's work week from 45 to 40 hours.

This new law will have far-reaching effects on both workers and employees across the South American country.

Let's dive into what the latest labor reform in Chile means for business and why having experienced legal representation in Chile is crucial.

The labor reform in Chile is essential to know when conducting business in Chile

What does the labor reform in Chile mean for business?

The National Congress passed the labor reform bill in Chile on April 11, 2023. The country will experience a progressive decrease in the work week, going from 45 to 40 hours.

Chile will now be in line with the majority of OECD member nations, which have a standard 40-hour work week.

Chile's left-wing President Gabriel Boric said it was a "pro-family project that aims at the good living of all".

The changes include a five-year transition period which will reduce the working hours by one hour of work per week per year, ending in 2028.

Businesses can adopt this change immediately or sooner than the five-year grace period. State-owned Copper giant Codelco announced they would implement the 40-hour work week by 2026.

There were other significant changes in labor reform in Chile besides this one. The bill also recognizes different flexible practices that companies and employees can agree upon.

For example, a 4 by 3 work model - consisting of four 10-hour days followed by three days off.

Parents of children under 12 also benefit by being able to organize different start and end times with their employees.

These reforms also ensure that workers' wages stay the same and in cases where specific job work hours cannot be reduced, extra rest days are provided during the year.

"This project contemplates a long yearning because since 1937 (the ILO) has been promoting the gradual reduction of the working day to 40 hours and in many countries, this already exists. Now it is going to be a reality in Chile because there has been the will to make it happen.," said...