Overview
Chile 4 Day Workweek
Chile doesn’t officially have a 4-day work week and follows a traditional 5-day work week, similar to most other nations. Despite this, there have been recent discussions about adopting a shorter work week in the country.
For example, the Chilean Congress passed legislation on 11th April 2023, known as the 40-hour Work Law. It amends the labor code to reduce the standard weekly working hours from 45 to 40 over 5 years to mitigate the impact on small and medium-sized enterprises.
This phased implementation began on April 26, 2024, with weekly working hours being reduced to 44. Further reductions will occur as follows:
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On April 26, 2026, the weekly working hours will be reduced to 42
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And on April 26, 2028, the hours will be reduced to 40 hours per week
The new law enables direct agreements between employers and employees about adopting a 4-day workweek, provided the requirement of working 40 hours per week is met. This change is particularly crucial as union representation is relatively low in Chile.
The country’s President Garbiel Boric praised the bill and described it as a “pro-family project that promotes the well-being of all citizens.” Companies that had implemented a shorter workweek before the passage of this legislation have already been awarded the 40-Hours Seal.
Key Aspects:
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Flexibility in working days: Starting from 26 April 2028, employers can distribute working hours over four, five, or six days per week. This allows for different workday arrangements, such as four days of work followed by three days off, with ten hours each working day.
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Exclusions from working hour limits: Due to the nature of their tasks, Job roles such as managers, administrators, and attorneys with administrative powers remain excluded from the standard working hour limits.
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Broader working hour regulations: The new legislation removes prior exemptions for remote employees, salespeople, and other roles that typically involve working off-premises. They will now be subject to the standard working hour limits, which ensures broader protections across different working environments.
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Exclusion of informal sectors: The law does not apply to the informal sectors of Chile's economy, which comprise more than a quarter of the country's workforce. This typically includes those parts of the economy that are not monitored by government control or regulation.
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Dispute resolution: In disputes over employee classification regarding exemptions, the Labour Inspectorate can decide, which can be appealed to a Labour Judge.
Challenges in Widespread Implementation of 4-Day Workweek in Chile
Adopting a four-day workweek following the 40-hour work law faces several challenges in Chile despite its potential work-life balance and productivity benefits.
These include:
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Contractual adjustments: Modifying employment contracts to align with the new 40-hour workweek standard introduces a significant administrative burden. Each contract must be reviewed and potentially renegotiated to comply with the new law, which is time-consuming and complex.
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Cultural shift in time tracking: Chile has a cultural norm rooted in Article 22 of the employment contract. It typically does not require employees to clock in and out. Transitioning to a system where time tracking becomes mandatory to ensure compliance with the 40-hour limit represents a significant cultural shift for companies and employees.
Small business enterprises will receive targeted support to address the challenges posed by implementing a shorter workweek. These will be administered by two decentralized technical bodies: the National Training and Employment Service (SENCE) and the Department of Labor.
The Future of the 4-Day Workweek in Chile
While a 4-day workweek is not new in Chile, reducing the standard 40-hour workweek to 32 hours represents a significant challenge. Still, there's a push to implement the 100:80:100 approach in partnership with 4 Day Week Global and local consultant ZM Consultores.
This means employees should be paid 100% of their salary for 80% of their work time and committed to maintaining 100% productivity. This sets the stage for a deeper exploration of how a shorter workweek could influence workplace dynamics in Chile.
