Chile: Upcoming Amendment to Working Hour Regime
On April 11, 2023, the Chilean Congress approved a Bill that reduces the ordinary weekly working hour limit from 45 to 40 hours (Bill N°11.179-13). This bill also includes other important amendments to the working hour and rest regimes. The bill was published into law on April 26, 2023. The amendments shall come into force after 1 year of its publication into law. The aspects of this new law are summarized below –
Reduction of the Ordinary Working Hours Limit
Currently, the duration of the ordinary workweek shall not exceed 45 hours weekly.
In accordance with the amendment, the duration of the working hours will be reduced from 45 to 40 hours. This modification shall enter into force gradually in a term of 5 years, counted from the publication of this law in the Official Gazette. Thus, after the first year of enforcement of the law, the ordinary working hours limit will be reduced to 44 hours, by the third year it will go down to 42 and, finally, to 40 hours after the 5th year.
The reduction of the working hours must be executed by mutual agreement with the employees and, if no agreement is reached, the employer must reduce the working hours proportionally between the different workdays of the week.
Furthermore, if the employer and employee agree that the workday indicated above can be distributed based on a weekly average of 40 hours in a cycle of up to four weeks, it may not exceed 45 ordinary hours. in each week, nor extend with this limit for more than two continuous weeks in the cycle. A calendar with the daily and weekly distribution of work hours in the cycle must be established by mutual agreement.
Flexibility in the Distribution of Workdays
Currently, A week is distributed in no more than 6 and no fewer than 5 days. No employee can work more than 12 hours a day, including overtime hours.
In accordance with the amendment, the 40-hours limit can be distributed on a weekly basis or on a basis of weekly averages in periods up to 4 weeks. In this case, the weekly limit is extended to 45 hours, which cannot be applied for more than 2 continuous weeks in a 4-week cycle.
The amendment shall also allow for the working schedule to be distributed in 4, 5, or 6 days, opening the possibility of a 4×3 workday scheme (4 days workweek with 3 days of rest) without needing authorization from the Labor Board. This shall come into force in the 5th year after the law’s publication in the Official Gazette unless the Company has reduced in advance its ordinary working schedule to 40 hours, in which case they can implement this change from the moment they meet the 40-hour limit.
Exclusion of the Workday Limit
Currently, as per Article 22 of the Labor Code, workers who provide services to different employers; managers, administrators, attorneys with administrative powers and all those who work without immediate superior control; those hired to provide services at their home or at a place freely chosen by them; commission and insurance agents, traveling salesmen, collectors and other similar agents who do not perform their functions in the premises of the establishment will be excluded from the limitation of working hours.
In accordance with the amendment Article 22 of the Labor Code is modified by reducing the grounds by which an employee can be excluded from the workday limits. As per the amendment, the exclusion of the working day limit shall only be allowed for employees who render services as managers, administrators, representatives with powers of administration, and all personnel who render services without an immediate superior control due to their functions. Every other situation that currently allows the exclusion of the working day limit has been suppressed.
In case of controversy, any of the parties can file a claim before the Labor Board to determine the applicability of the exclusion for a specific case, being possible to challenge the Board’s resolution before the Labor Courts.
Part-Time Employees Working Hour
Currently, the labor law states that the working day of a part-time employee shall not exceed two-thirds of the ordinary working day.
The amendment establishes that the part-time employees’ working hours shall not exceed 30 hours per week.
Time band for parents and caretakers of children up to 12 years
The amendment establishes a co-responsibility mechanism wherein working mothers and fathers or caretakers of minors up to 12 years of age, shall be entitled to a total of a 2-hour band, within which they may anticipate or delay the start of their work by up to 1 hour, which shall also determine the end time. If both parents are employees, either of them, at the election of the mother, can use this right. The employer cannot refuse except when the company operates on a schedule that does not allow the workday to be anticipated or postponed, or due to the nature of the services provided by the employee (for example, customer service work, emergency services, shift work, security guards or similar). In case of a dispute, the Labor Inspector will resolve it (at the request of either party).
The new law provides that special schedules can be authorized where the average weekly hours in the cycle must not exceed 42 hours on average. Employees will be entitled to additional vacation days for days worked over the statutory average. These additional days can be compensated in cash. This rule will become effective the fifth year after publication of the law. The Ministry of Labor must issue a regulation (within six months of the publication of this law) in which it shall determine the limits and parameters for the distribution of exceptional schedules.
Compensation of Overtime for Rest Days
Currently, overtime cannot be compensated with additional rest days.
By written agreement between the parties, the exchange of overtime for additional rest days will be allowed, with a maximum of 5 additional rest days each year which must be used by the employee within six months following the cycle in which the overtime hours originated, for which the employee must notify the employer 48 hours in advance. For each overtime hour of work, 1.5 hours of rest day must be compensated. Overtime compensation for additional days of holidays will be governed by the same surcharge that corresponds to your payment, that is, for each overtime hour there will be an hour and a half of holiday.
Electronic attendance records have been formally introduced among the options for the control of the working schedule. The use of an electronic registration system is added as a time control measure (to the current attendance book and clock control). A Labor Bureau resolution shall establish the general conditions and requirements. At the request of any company, the Labor Bureau will determine whether a customized electronic system complies with the conditions.
Takeaway – Employers should begin reviewing their employment policies in order to effectively make changes as per the above amendments in the laws.