What are the standard working hours in Chile?

As of April 2024, standard working hours in Chile are limited to 44 hours per week. These working hours will gradually decrease over time without impacting employee wages. The reduction will occur in stages:

• The standard working hours will be reduced to 42 hours on April 26, 2026.
• Further reduction to 40 hours will take effect on April 26, 2028.

Certain employees are exempt from these standard working hours, including managers, administrators, attorneys with administrative powers, and employees without immediate supervision.

Additionally, parents and caretakers of children up to 12 years of age have the right to adjust the start or end time of their workday by a total of 2 hours per day.

Is overtime governed by law in Chile? If so, what are the specifics outlined by law?

In Chile, overtime is regulated by law and considered an exceptional measure with strict limitations. The details are as follows:

• Both the employer and the employee must agree to any overtime work.
• The law allows a maximum of 2 hours of overtime per day.
• Overtime is compensated with a 50% surcharge on the regular wage.

Alternatively, the employer and employee may agree in writing to compensate overtime with additional holiday days instead of extra pay. In such arrangements:

• They can agree on up to 5 extra working days off per year.
• The employee must use these additional days off within 6 months following the accumulation of overtime hours.

How is overtime payment calculated in Chile?

In Chile, overtime payment is calculated with specific guidelines:

• Overtime is considered exceptional and must be voluntarily accepted by the employee.
• It is compensated with a 50% premium over the regular hourly rate.
• Overtime can be agreed upon for a maximum of 2 hours per day.
• The total amount of ordinary and overtime hours cannot exceed 52 hours per week.

Alternatively, the employer and employee can agree in writing to compensate overtime with additional holidays instead of premium pay. In such cases:

• Up to 5 additional working days off per year can be agreed upon.
• These days must be taken by the employee within 6 months following the cycle in which the overtime was incurred, with a 48-hour advance notice to the employer.
• For each hour of overtime, 1.5 hours of rest time is provided in return.

It is important to note that certain roles like managers, administrators, and employees without immediate supervision are excluded from the ordinary working hour limits. However, employees such as those who work from home or positions previously exempt, like commission agents and traveling salespeople, are now subject to these working hour limits.

What are the eligibility rules for time off in lieu in Chile?

In Chile, employers and employees can agree in writing to compensate overtime hours with additional vacation days, known as time off in lieu. The eligibility rules for this arrangement include:

• Employees can be granted up to 5 extra working days of rest per year as compensation for overtime.
• These additional vacation days must be used within 6 months following the overtime period.
• Employees must provide their employer with a 48-hour notice when requesting to take these additional vacation days.
• If the extra vacation days are not used within the specified time frame, they are converted into wages for the employee.
• The compensation rate for overtime converted into vacation days is calculated such that each hour of overtime equates to 1.5 hours of vacation.

How many days before the actual start date should the employment agreement be signed for payroll purposes in Chile?

In Chile, the employment agreement must be signed within 15 days of a worker's incorporation for standard payroll purposes. However, if the employment agreement relates to specific work or a project lasting less than 30 days, it must be signed within 5 days.

Can employment agreements be backdated in Chile?

In Chile, employment agreements cannot be backdated. The start date in the employment agreement must align with the date reported to the Social Security system entities.