Chile: Special Law enacted to Protect Jobs during the COVID-19 crisis

In the context of the COVID-19 emergency, a special law was passed in April 2020 to protect job positions (the “Law”). Under this Law, which will be in force for 6 months, companies can apply to suspend the labour contracts (rather than terminate the contracts) and employees can receive subsidies from the statutory unemployment insurance system. In this sense, “subsidies” refers to a monthly payment equivalent to 70%, 55%, 45%, 40%, 35% and 30% of the last 3-month base remuneration average, considered for unemployment insurance contributions. The Law also allows some companies to reduce salaries and working time, and applies to employees who are entitled to a limited remuneration complement from the unemployment insurance system.

The retail, commerce and tourism industries are the more demanding activities seeking to be covered by this special statute. To date, requests to suspend employment contracts have come from more than 80,000 companies, affecting 550,000 employees. Likewise, more than 3,000 companies have since recognised salary and working time reduction agreements under the Law.

Cariola Díez Pérez-Cotapos attorneys are available to assist you with these and other workplace issues. For more information on these articles or any other issues involving labour and employment matters in Chile, please contact Ricardo Tisi (Partner) of Cariola Díez Pérez-Cotapos at rtisi@cariola.cl or visit www.cariola.cl.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.