On 26 April 2024 a new law amending the Labour Code to reduce the weekly working hours limit from 45 to 40 hours will go into effect.
The reduction applies to all jobs regulated by the Labour Code. It will enter into force gradually over a period of five years, in an effort to avoid affecting small and medium-sized enterprises and employability.
This change represents a crucial step forward in aligning Chile’s labour regulations with international standards and addressing longstanding concerns regarding excessive working hours.
The working week has long been one of the main demands of employees in Chile, and the demands of modern life make it difficult to reconcile family life or recreation with the 45-hour working week. The new law is a response to the historical demands. It was created to improve employees’ quality of life: it aims to allow them to develop a family life and/or have free time for education or entertainment.
Another reason for passing the new law is that several studies have indicated that European countries with shorter working hours have higher average productivity than those with longer working hours. A longer working week therefore does not necessarily mean enhanced productivity.
However, reduction of weekly working hours is not the sole purpose of the new law. It also contains new rules on flexibility in the distribution of working hours, exclusions from the limits on working hours, and modifications related to overtime compensation. It further establishes rules regarding the reconciliation of work and family.
The most relevant aspects of the Law are set out below.
Reduction of the ordinary weekly working hours
The limit on the ordinary weekly working hours will be reduced from 45 to 40 hours, without reducing employees’ wages. This modification will enter into force gradually: on 26 April 2024, the limit will be reduced to 44 hours; on 26 April 2026, it will drop to 42; and finally to 40 hours as of 26 April 2028.
The allocation of the reduction of the weekly working hours must be agreed upon by the parties. If no agreement is reached, the employer must reduce the hours proportionally among the weekly working days.
Flexibility in the distribution of working days
The new law also allows for the working schedule to be distributed over four, five, or six days, opening the possibility of an altered workday scheme without the need for authorisation by the Labour Inspectorate. This means, for example, that it will be possible (with the agreement of the employees) to implement a scheme of four working days followed by three rest days, with ten hours per working day.
This change will come into force on 26 April 2028. If the employer has already reduced its ordinary weekly working schedule to 40 hours before that date, the change can be implemented from the moment it meets the 40-hour limit.
Employees who are excluded from the ordinary working time limit
One of the most important changes in the new law that employers need to be aware of is the modification of the Labour Code provisions regarding employees who are excluded from the limits on working hours.
Under the new rules, managers, administrators, attorneys with administrative powers, and all other employees who work without immediate supervision will remain excluded from the ordinary working hour limits due to the nature of the tasks performed.
However, employees who work at home or in a place freely chosen by them, commission and insurance agents, traveling salespeople, collectors, and other similar employees who perform their job functions outside the employer’s premises, all of which were previously exempt, will no longer be excluded from the limits on working hours.
If there is a dispute over the employee’s classification, at the request of any of the parties (or the applicable union), the Labour Inspector will decide whether a particular job falls within an excepted category. This decision may be appealed to a Labour Judge.
This change means that employers will need to review the employment contracts of all employees who are currently exempt from the limits on working hours, to verify whether or not the exception continues to apply.
This new modification will come into force on 26 April 2024.
Overtime
The new law also allows the parties to agree in writing that overtime will be compensated by additional holidays instead of premium pay. In such cases, the parties may agree to up to five additional working days off per year. These days must be taken by the employee within the six months following the cycle in which the overtime hours were incurred, and the employee must provide forty-eight hours’ notice to the employer. For each overtime hour of work, one and a half hours of rest time must be compensated.
This modification will come into force on 26 April 2024.
Modifications related to the reconciliation of work and family life
The new law introduces a measure aimed at reconciling the work and family life of employees by providing greater flexibility at the beginning of the working day for mothers and fathers.
Parents and caretakers of children up to twelve years of age will have the right to a time band of two hours total, so that they can vary by up to one hour the time at which they begin and end their working day. The employer can only deny the use of this right in specific cases set out in the law.
Takeaway for Employers
The new law provides that under no circumstances may employers reduce the salaries of their employees in response to the mandated reduction in working hours. This will involve challenges for employers, as they will want to ensure that the adjustments to employee working hours do not affect productivity or result in higher economic expenses.
Cooperation and dialogue between employers and employees will be key to agreeing on conditions that allow them to adapt to the new working hours and ways of organising the work.
Overall, the reduction in working hours is expected to adapt the country to international norms, facilitate the balancing of family life with the work environment, and enhance well-being and work performance.
Discover more about working hours on our Global HR Law Guide
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The view from other places.
25 Apr 2024 at 00:00
Brazil:
The 1988 Constitution reduced the maximum weekly working hours from 48 to 44, while providing for special regimes of lesser maximum hours, notably 36 hours for rotating shifts. In the past ten years, employers have been increasingly consenting to 40-hour working weeks through sector CBAs or as a matter of internal policy, especially for office operations. This gave momentum to a bill to amend the Constitution to provide for a 40-hour working week. The bill was shelved after the COVID crisis, but in 2023, another bill was presented to Congress providing for the reduction of working hours without reducing salaries proportionally. The bill would have little real effect because this practice is already widespread even if not expressly provided for in the law.
In addition, compensation mechanisms for added hours other than simply paying for overtime have long existed under CBAs, and a 2017 reform allowed this to be done through individual agreements, which has further increased the use of such mechanisms.
In 2021 Colombia passed a law to progressively reduce the standard work schedule from 48 hours to 42 hours per week, with no reduction in employee’s salaries or infringement upon their existing rights. Under this legislation, the weekly working hours are reduced by one hour per year in 2023 and 2024, and by two hours per year in 2025 and 2026. The work schedule may be distributed across five or six days, subject to mutual agreement between employers and employees, with a mandatory rest day.
As with Chile’s law, this law was enacted to improve labour and economic conditions in Colombia. The primary goals are toenhance productivity, increase employment, improve quality of life for employees, and align with international standards.
When the reduction in working hours is complete in 2026, employers will be no longer required to grant a ‘family day’ per semester and to provide two hours per week for recreational, sports and training activities (provided there are more than 50 employees).
Transitioning to a four-day workweek as a means to enhance working conditions and promote mental wellbeing has long been debated and experimented with in Finland, but a major shift in this direction has yet to materialise. Whereas some companies have already introduced a four-day workweek, the ongoing revolutions of AI and technology suggests that the discourse surrounding this topic will persist and likely intensify in the years ahead.
In Germany, the statutory upper limit is eight hours per business day (Monday to Saturday) averaged over six months or 24 weeks. Hence, a regular 48–hour working week is legally possible. However, under collective bargaining agreements and individual employment agreements the regular weekly working hours for full–time employees are usually in the range between 35 and 40 hours and most often spread over a five-dayworkingweek. Reduction of regular working hours and moving to a four-dayworking week are topics that are increasingly subject to debate, frequently driven by unions.
According to Greek legislation, full-time work is defined as40 hours per week, which may be spread over a five-day or six-day working week. In contrast to the provision of the new Chilean law, overtime can only be compensated by way of payment of the corresponding premium amount. There is no provision in Greek law for any agreement to grant paid time off to the employee instead.
In Italy, ‘normal’ working time, which applies to the majority of workers with the exception of executives, home workers and teleworkers, is set at 40 hours per week, with at least 11 hours of rest every 24 hours and at least 24 consecutive hours of rest every seven days. Overtime, which by law cannot exceed 250 hours per year, must be paid with surcharges.
Having this legal framework in mind, a recent report showed that 65.5% of young people, 66.9% of adults and 69.6% of over-50s in Italy demand more attention to psychological well-being at work, and are in favour of reduced working time for the same salary. The need to establish a balance between personal and working life is one of the most important goals of young workers, who are no longer willing to sacrifice their personal lives in favour of work.
For this reason, some large Italian employers are implementing alternative employment models, for example a four-day working week with no reduction in salaries. So far, these experiments have apparently demonstrated that reducing working hours not only does not compromise their economics, but on the contrary, improves productivity and well-being of employees. However, as of now, this solution remains controversial and experimental.
Currently in Mexico, the legal maximum working hours are 48 hours per week, with at least one day of rest mandated for every six days worked. A recent proposed amendment seeks to reduce the workweek to five days, effectively reducing the weekly working hours from 48 to 40. Currently, this proposal is undergoing deliberation within the legislative branch. For it to be enacted into law, it must secure the votes of two-thirds of both chambers of Congress and then ratification by at least 17 local congresses in the states. Only then would it become legally binding.
The principal challenge for employers regarding the reduction of the workweek is to sustain and harmonise workplace operations without incurring substantial cost escalations. This requires reorganisation of workers’ shifts, recalculation of payments for vacation premiums and overtime, and possibly recruitment of additional personnel to maintain adequate operational levels. Therefore, various sectors and industries have advocated for a gradual implementation approach that would cater to the unique realities of each sector and employer size, thereby fostering adaptability and flexibility.
In New Zealand, the maximum number of hours (excluding overtime) must be no more than 40 hours per week unless the employer and employee agree otherwise, which is common. If the maximum number of hours (excluding overtime) is more than 40 hours per week, the parties must endeavour to fix the daily working hours so that they are worked on not more than five days in the week.
Chile’s reduction of the weekly working hours limit from 45 to 40 hours should positively impact employees’ work-life balance and will also bring Chile’s labour regulations closer to international standards. Currently in Poland a 40-hour working week is the norm, but a further reduction to 35 hours in the future is already being considered.
In Slovakia, the normal working time is a maximum of 40 hours per week. In the case of two or more shift work patterns, the weekly working time is even shorter. Moreover, currently, there are proposals to introduce a four-day working week, which will bring many challenges for employers.
Pursuant to the Turkish Labour Code, the upper limit of normal weekly working hours is 45 hours. Although the reduction of this limit is a subject of debate in Turkey, no official action has yet been taken in this direction.
Under Ukrainian legislation, employees’ working hours cannot exceed 40 hours per week. However, during the current period of martial law, the normal weekly working hours may be increased to 60 hours for employees working in critical infrastructure (e.g. the defence industry and sectors that are vital to the health and safety of the population).
The UK has a very liberal approach to working hours limits. The upper limit is 48 hours per week averaged over a 17–week period, but employees can be asked to ‘opt out’ of this limit (they can choose to ‘opt back in’ by giving up to three months’ notice), and it is common for them to do so,particularly in industries where long hours are normal. It is rare to see litigation or disputes over excessive working hours, though this is sometimes cited as an aggravating factor in other complaints. Note that there are more specific restrictions for certain sectors such as transport and aviation.
Insights
Chile introduces 40 hour working week
The reduction applies to all jobs regulated by the Labour Code. It will enter into force gradually over a period of five years, in an effort to avoid affecting small and medium-sized enterprises and employability.
This change represents a crucial step forward in aligning Chile’s labour regulations with international standards and addressing longstanding concerns regarding excessive working hours.
The working week has long been one of the main demands of employees in Chile, and the demands of modern life make it difficult to reconcile family life or recreation with the 45-hour working week. The new law is a response to the historical demands. It was created to improve employees’ quality of life: it aims to allow them to develop a family life and/or have free time for education or entertainment.
Another reason for passing the new law is that several studies have indicated that European countries with shorter working hours have higher average productivity than those with longer working hours. A longer working week therefore does not necessarily mean enhanced productivity.
However, reduction of weekly working hours is not the sole purpose of the new law. It also contains new rules on flexibility in the distribution of working hours, exclusions from the limits on working hours, and modifications related to overtime compensation. It further establishes rules regarding the reconciliation of work and family.
The most relevant aspects of the Law are set out below.
Reduction of the ordinary weekly working hours
The limit on the ordinary weekly working hours will be reduced from 45 to 40 hours, without reducing employees’ wages. This modification will enter into force gradually: on 26 April 2024, the limit will be reduced to 44 hours; on 26 April 2026, it will drop to 42; and finally to 40 hours as of 26 April 2028.
The allocation of the reduction of the weekly working hours must be agreed upon by the parties. If no agreement is reached, the employer must reduce the hours proportionally among the weekly working days.
Flexibility in the distribution of working days
The new law also allows for the working schedule to be distributed over four, five, or six days, opening the possibility of an altered workday scheme without the need for authorisation by the Labour Inspectorate. This means, for example, that it will be possible (with the agreement of the employees) to implement a scheme of four working days followed by three rest days, with ten hours per working day.
This change will come into force on 26 April 2028. If the employer has already reduced its ordinary weekly working schedule to 40 hours before that date, the change can be implemented from the moment it meets the 40-hour limit.
Employees who are excluded from the ordinary working time limit
One of the most important changes in the new law that employers need to be aware of is the modification of the Labour Code provisions regarding employees who are excluded from the limits on working hours.
Under the new rules, managers, administrators, attorneys with administrative powers, and all other employees who work without immediate supervision will remain excluded from the ordinary working hour limits due to the nature of the tasks performed.
However, employees who work at home or in a place freely chosen by them, commission and insurance agents, traveling salespeople, collectors, and other similar employees who perform their job functions outside the employer’s premises, all of which were previously exempt, will no longer be excluded from the limits on working hours.
If there is a dispute over the employee’s classification, at the request of any of the parties (or the applicable union), the Labour Inspector will decide whether a particular job falls within an excepted category. This decision may be appealed to a Labour Judge.
This change means that employers will need to review the employment contracts of all employees who are currently exempt from the limits on working hours, to verify whether or not the exception continues to apply.
This new modification will come into force on 26 April 2024.
Overtime
The new law also allows the parties to agree in writing that overtime will be compensated by additional holidays instead of premium pay. In such cases, the parties may agree to up to five additional working days off per year. These days must be taken by the employee within the six months following the cycle in which the overtime hours were incurred, and the employee must provide forty-eight hours’ notice to the employer. For each overtime hour of work, one and a half hours of rest time must be compensated.
This modification will come into force on 26 April 2024.
Modifications related to the reconciliation of work and family life
The new law introduces a measure aimed at reconciling the work and family life of employees by providing greater flexibility at the beginning of the working day for mothers and fathers.
Parents and caretakers of children up to twelve years of age will have the right to a time band of two hours total, so that they can vary by up to one hour the time at which they begin and end their working day. The employer can only deny the use of this right in specific cases set out in the law.
Takeaway for Employers
The new law provides that under no circumstances may employers reduce the salaries of their employees in response to the mandated reduction in working hours. This will involve challenges for employers, as they will want to ensure that the adjustments to employee working hours do not affect productivity or result in higher economic expenses.
Cooperation and dialogue between employers and employees will be key to agreeing on conditions that allow them to adapt to the new working hours and ways of organising the work.
Overall, the reduction in working hours is expected to adapt the country to international norms, facilitate the balancing of family life with the work environment, and enhance well-being and work performance.
Discover more about working hours on our Global HR Law Guide
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The view from other places.
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