Three Chilean lawyers specializing in labor law provide their projections on the reform promoted by the government of Gabriel Boric.
Finally, the deadline was met: this Friday, April 26, Chile began the gradual application of the reduction in the working day from 45 to 40 hours per week. Starting today, Chileans must work only 44 hours a week, while the final goal of 40 is expected to be reached by 2028. The arrival of the first phase has been celebrated by the government of Gabriel Boric, the main promoter of a similar project. as seen in other countries in the region such as Colombia and Mexico.
Among its main features, the 40-hour Law prohibits reducing salaries in relation to the reduction in working hours, facilitates schedule adjustments for parents and childcare workers, as well as allows the immediate introduction of 40-hour weeks for companies. that require it. In essence, it seeks to achieve the goal proposed by the International Labor Organization (ILO). This institution assures that excess work generates losses of up to 3% in the GDP of the affected countries.
Although applying abrupt or gradual reforms is complex to adapt to each reality, the truth is that in Europe it has been demonstrated that 40-hour work weeks can be the common norm. There are illustrative cases such as Spain, where this type of working day has been in force for four decades. Neighboring Portugal, as well as Greece and Italy share this measure, and France even reduced the weekly working day to 35 hours in 2003, without affecting productivity.
“I know that it can be very difficult for some companies, especially productive sectors, which depend on uninterrupted work, to adapt their workdays to fewer hours. But it does not necessarily decrease productivity. In fact, there are studies that say that employees manage to be more effective with fewer hours of work,” says Consuelo Letelier, legal director of Talana, for AméricaEconomía .
These exemplary cases can also be found in developed countries such as Iceland: there, a four-day working day was implemented for public employees between 2015 and 2019. The results were a decrease in stress and burnout. Similar results occurred in nursing homes in Sweden, as well as in Microsoft's Japanese subsidiary. For example, in the corporation, it was shown that workers improved their productivity by up to 40% and increased sales. In parallel, electricity, ink and paper expenses, among others, were reduced.
Still, again, each experience is unique, especially in a complicated and developing region like Latin America. “There are signs that people can be more productive. But I believe that it is a debate that does not have a certain answer. I think that only time will tell us if in Chile we can actually maintain productivity like now. Or if it increases or decreases,” adds Letelier.
Although the specialist highlights that the new law includes innovative changes that make working hours more flexible and make them available for fairer agreements between employers and workers. For example, the possibility of enabling cycle days is established. As an example, an employee can work 35 hours a week and later compensate them with a 45-hour week. Another highly commented novelty has been the “four by three” shift, which introduces the possibility of working four days a week.
“These are days that existed for exceptional periods, but now they will be more transversal. But again, its success will depend on what services each company provides. This will depend on whether or not it is useful for you to implement four-by-three days or to propose cycles that give you an average of forty hours per week at the end of the month,” says the legal director.
For her part, Beatriz Pérez, founding director of Kippa Innovación, a labor management consultancy, believes that many companies in Chile have not taken the necessary precautions to adapt to the new day. “From Kippa, we were able to see the fact that there is a bad practice in certain companies of not studying their organizational culture; of not looking inward and analyzing how they are made up, who are the people who really make up their organization.”
Likewise, Pérez maintains that companies that have already adopted the reduction of working hours in advance, including the goals programmed for the coming years, normally have already well defined how to measure and optimize their productivity, beyond working hours. “I think the pandemic taught us that we do not need to be in person at all jobs for there to really be productivity. During this crisis, many companies adapted to teleworking and shift designation, which makes it possible to decide in the long run whether the immediate reduction to 40 hours is feasible or not.”
So far, the profiles of companies that opt for 40 hours have been identified. Marta Meneses, labor manager of Auditeris, a consortium specialized in service outsourcing , points out the following. “What we see most is that this decision is made easier for technology companies, because they still mostly apply remote work. It is difficult for retail companies , because they are a little more structured companies. So, it costs them a little more to adapt to these new changes,” explained Meneses for AméricaEconomía .
On the other hand, the Kippa representative considers that productivity also involves time management during work hours. As an example, he mentions that a company can impose a 10-hour work day, but of that time, only five hours are worked, because the employees were distracted by other activities. While others did not meet the goal either, because they were forced to move from one place to another for something expendable. “Many times we realize when inspecting a workplace that workers go to buy spare parts from very distant locations, when they can turn to suppliers that save them time,” says Pérez.
Another key point in the discussion of this labor reform revolved around article 22 of the Chilean Labor Code. In section two, it was maintained that some job positions were exempt from working with working hours, if so determined by the employer. The problem is that this created a legal loophole that allowed certain managers to avoid paying overtime to their employees by forcing them not to mark the card after extended hours.
In mid-March, the Minister of Labor of Chile, Jeannette Jara, announced that the exemption from working hours would now only be applicable to workers who hold managerial and administrative positions and those who perform their duties without direct and immediate supervision. It is worth clarifying that the respective Labor Inspector must clarify whether an employee falls within the situations described. Its resolution will determine whether the case merits a judge's decision.
“This measure removes the possibility of not limiting the working hours of those employees who operate through teleworking. Now, there is also a scenario of uncertainty about how we are going to implement this. Supervising isn't easy either: getting people to clock in at the right time when they're at home. Or that they actually start working at the designated time,” warns Consuelo Letelier.
In recent weeks, the Chilean Labor Directorate approved some additional changes that determined the final profile of labor law. One of the most talked about involves giving up overtime payments in exchange for extending the vacation period. “It benefits workers in the sense of being able to work overtime, then exchange it for a holiday and even add it to their fifteen-day legal holiday,” says Meneses.
Although perhaps the most controversial “last minute change” was the ruling that forced all companies to reduce the working day by at least one hour. This change must occur in one day and it is not allowed to deduct a shorter time. Quickly, criticism from the business sectors did not wait. “It happens that many companies had already defined that they were going to discount fifteen minutes a day. They even signed annexes,” clarifies the Auditeris labor manager.
Finally, the law has also sparked rejection in Chilean society, although for the wrong reasons. As in other political changes, misinformation on social networks has been the order of the day. “The idea spread that after the change in article 22 of the Labor Code, no one will have limits on working hours. And many people understood how employers could force them to work all day,” explains Meneses. But now that the new changes to the working day are already a reality in Chile, speculation will give way to experiences that will determine the success of this project, which is advancing at a slow pace.
