Chile: Significant changes to weekly working time

Employer Action Code: Act

Six years after they were proposed, Congress has approved amendments (Law 21,561) to Chile’s Labor Code that will, among other things, gradually reduce the maximum normal workweek from 45 to 40 hours (with no loss in pay) and introduce new working time options, such as the averaging of weekly working time, a shorter workweek, flexible start times for parents of small children and the ability to trade overtime pay for paid annual leave. These changes aim to improve work flexibility and enhance work/life balance. The law was published in the Official Gazette on April 26, 2023.

Key details

• A statutory 40-hour workweek will be phased in over five years. The maximum number of hours in the normal workweek will be phased down from the current 45 hours to 44 starting April 26, 2024, then 42 in the third year after the law’s publication and 40 in the fifth year. Normal work hours must be distributed over at least four days.
• Subject to employee consent, the 40-hour week (once phased in) may be met as an average over up to four weeks, provided normal weekly hours never exceed 45 and do not exceed 40 for more than two weeks in the averaging period.
• Special working hour regimes for work that requires continuous operations (such as mining) may have longer workweek cycles, averaging up to 42 hours over a fixed number of weeks with the additional hours accruing as paid time off, beginning in 2028. The exact parameters for averaging time will be determined later.    
• Exceptions to the restrictions on normal working hours and eligibility for overtime will be narrowed to managers, administrators and employees who are not routinely subject to oversight due to the nature of their work.
• Employees may exchange hours of overtime worked for up to five days of paid time off, which must be used within the six-month period that follows.
• Parents and primary caregivers of children under age 12 will have the option of having flexible start and end times of their working day by up to two hours (one hour for the start and one hour for the end). Employers must accommodate the requests unless the nature of work or scheduling precludes such flexibility. The Labor Inspectorate will settle any disputes on feasibility. 

Employer implications

Employers may adopt the workweek changes sooner than the phased-in maximum deadlines. While 35% of companies surveyed by WTW in Chile already observe a 40-hour workweek (in offices), 40% have a 45-hour workweek (in offices). Companies should analyze the new requirements and options and consider the effects on their working time policies.