Work Hours in Chile: Flexibility in Chile’s Job Market (2024)

While not as popular as some of its other Latin American counterparts, Chile is widely regarded as a center of economic progress and innovation. This country’s fast-growing IT sector has given it names like Chilecon Valley. If you visit Chile today, you’ll discover thousands of IT companies, and the number of establishments is only bound to increase as the region’s internet connectivity capabilities grow. 

Another reason why Chile is considered a source of top tech talent is its favorable labor laws, especially in terms of working hours. To match International standards, Chile’s congress replaced its 45-hour work week with a 40-hour work week, and this new law has several beneficial effects. The new work hours in Chile encourage employers to be more flexible regarding how they allocate tasks and organize their teams. Spending less time at work also ensures workers can enjoy a better work-life balance. 

Standard Work Hours vs. Market Trends in Chile

Chile’s new labor law reduces the weekly working hours from 45 to 40 to align their work ecosystem with international standards and concerns about an ineffective workforce. This new regulation applies to all jobs regulated by the local labor code. The new labor law in Chile was incorporated in April 2024. However, new Chile working hours will only take effect over five years to avoid any drastic changes that may adversely affect small and medium businesses. 

There have been several concerns in the past about the demanding nature of Chile’s modern life as many employees struggle to achieve a seamless work-life balance. New Chile Work hours ensure workers will have more time to spend with their family, learn a new skill, or try their hands on a new hobby. The government’s new labor laws on working hours in Chile aren’t only about reducing the time spent at work. They also feature new regulations on the distribution of work hours, changes to overtime compensation, and those excluded from these changes. 

Employee working hours in Chile will be reduced from 45 to 40 hours without a reduction in their wages. As mentioned earlier, this reduction will not take place at once. In April 2024, working hours were reduced to 44 hours, and they will drop further to 42 hours in April 2026. This limit will drop even further to 40 hours by April 2028. Local labor laws stipulate that the agreement on how the work hours are to be reduced should be a mutual agreement between employee and employer. If there’s no agreement between both parties, the employer is expected to reduce the number of hours worked each day by an equal amount.”

While the lockdown period showed the world that work teams can operate with a high level of flexibility, it wasn’t until 2023 that many regions began to implement new labor rules to give more freedom to employees. Chile is not the first country to implement a 40-hour work week for its labor force. Countries like the United States, Greece, Portugal, Hungary, and the Slovak Republic also operate 40-hour work weeks. 

These countries believe that reducing the amount of time workers spend working can improve their mental health. Furthermore, the shorter workweek is augmented by mental health programs and regular evaluations. 

Read more: Employee Benefits in Chile

Legal Limits and Flexibility: Striking a Balance

One of the biggest advantages of the Chile 40-hour work week is that employers are allowed to distribute their work schedule over four, five, or six days. Employers can design their work weeks however they deem fit without seeking permission from the Labour Inspectorate. However, incorporating this new schedule is subject to agreement between employers and workers. 

Currently, employers in Chile are expected to re-design their schedules to fit the new 44-hour limit. By April 2028, employers are expected to have adjusted to the 40-hour work week. Employees who fall under the Exceptional Work Scheme (such as those working in mining, health, and agriculture) can have an average of 42 working hours per week. However, employers must compensate for the additional working hours with rest days or money.   

One of the biggest changes stipulated by the new labor law, which employers need to be aware of, is the alteration to the list of employees who are exempted from this new working hour limit. Regulations stipulate that attorneys with administrative powers, managers, and staff members without direct supervision are excluded from the changes to this schedule. On the other hand, remote employees, traveling salespeople, insurance agents employees whose earnings depend on commission, and any other employees who work outside the company’s premises are no longer exempt from the limits on working hours. 

If there is a dispute over an employee’s correct classification, the employer or employee may contact the Labour Inspectorate to determine the correct job category. A labor judge may appeal any further disagreement. To comply with new regulations, employers are expected to review the contracts of employees who were previously exempt from working hour limits, depending on whether or not the exemption continues. 

Rethinking Overtime: From Compensation to Work-Life Balance

Chile’s labor laws also allow both parties to agree and document that overtime worked will be compensated with additional rest days instead of monetary payment. In this type of scenario, employers and employees may add up to five working days off annually. Each hour of overtime is worth one and a half hours of rest. Employees must take these holidays within six months after the period they worked the overtime. Workers must also offer their employer a 48-hour notice before going on their compensatory holidays. 

Embracing Flexibility: Provision for Depedent and Childcare

Aside from the freedom to negotiate their working hours with employers, employees can also enjoy a better work-life balance. This added flexibility will influence productivity, talent management, and work scheduling. According to the new labor laws, employees with children younger than 14 years are entitled to preferential rest days and may choose to use these days during the school holiday period. Workers with children or dependents can also work from home as long as their job description allows. However, the employer may reject the right to work remotely, partially or fully. These workers are also entitled to work-day alterations during their child’s holiday. 

Meeting Employee Expectations: PTO, Flex Hours, and Beyond

Chile’s latest changes to labor laws and working hours are now common knowledge throughout the country. As a result, workers expect to see employers make conscious efforts to incorporate these changes. While employers are expected to adjust the schedule of operations to suit regulatory changes, they must not reduce their employees’ pay. Organizations may take steps to reduce costs, such as switching to remote teams, to ensure they can maintain the same amount of compensation. 

Workers also expect to negotiate with their employers on the terms of their new work schedule to allow them to adapt faster to these law changes. They must also clearly state their readiness to accommodate changes that support a better work-life balance. 

Further reading: Employer of Record in Chile and Payroll Taxes & Expenses in Chile

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Article author

Vit Koval

Co-founder at Globy

A top Global Hiring voice on LinkedIn, co-founder of Globy, and host of Default Global. Using deep expertise in global hiring, remote work, and global business expansion to help companies excel worldwide with innovative strategies.