What prompted this legislative change?

As we previously reported, the Senate Labour Commission approved the bill on 25 January 2023. Introduced in 2017 during Sebastián Piñera's administration, it was revived by President Boric's administration to improve work-life balance and productivity.

How will the reduction in working hours be implemented?

The reduction will be gradual over five years:

- From 26 April 2024, the weekly limit will decrease to 44 hours.

- From 26 April 2026, it will further drop to 42 hours.

- From 26 April 2028, the weekly working hours will be capped at 40 hours.

How does the new law affect the distribution of working hours?

The law introduces flexibility in work schedules. Employers can distribute working hours over four, five, or six days. This allows for a four-day work week with ten-hour days, providing employees with better time management options for personal commitments.

Who will be exempt from the working hours limit?

Managers, administrators, and those working without direct supervision remain exempt. However, home workers, commission agents, and travelling salespeople will no longer be excluded from the working hours cap.

What changes are there to overtime compensation?

The new law allows employees to opt for additional holidays instead of extra overtime pay. Employees can gain up to five additional days off annually, which must be taken within six months of accruing the overtime. This provides more options for employees to balance their work and personal lives.

How does the law support work and family balance?

Parents and caregivers are granted a two-hour flexible time band to adjust their start and end times by up to one hour. This helps parents manage their work schedules around family needs, improving work-life balance.

What challenges might employers face with this new law?

Employers must note that salaries cannot be reduced due to reduced working hours. This requires careful planning to maintain productivity and manage economic impacts. Cooperation and dialogue between employers and employees is crucial for adapting to the new working hours and organizational changes.

What are the expected benefits of the new law?

The law is expected to improve employee well-being, align Chile's labour standards with international norms, and enhance productivity. The gradual implementation and flexibility provisions are designed to support both employers and employees, fostering a more balanced and productive work environment.

What should employers do to prepare for this change?

Employers should review their current payroll systems and employment contracts to ensure compliance with the new law. Engaging in open discussions with employees to explore flexible work arrangements and address concerns will be essential for a smooth transition.