Chile: Law No. 21,628, Amends Law No. 19,728, which Establishes the Unemployment Insurance, Among Other Measures
Authors: Ignacia López and Bárbara Zlatar
On October 31st, 2023, Law No. 21,628 (the “Law”) was published in the Official Gazette. The Law amends Law No. 19,728, which establishes unemployment insurance, and adds a new subsection to Article 9 bis of the Labor Code.
Among the amendments made to the unemployment insurance law, we highlight the following:
- The reduction of the access requirements for affiliates to have a severance benefit charged to the individual severance account.
According to Law No. 19,728, among the requirements for affiliates to exercise their right to a severance benefit, it is required to (i) register a minimum of 12 continuous or discontinuous monthly contributions since his/her affiliation to the Unemployment Insurance if he/she (ii) has an employment agreement for an indefinite term, and (iii) a minimum of 6 continuous or discontinuous monthly contributions if he/she had an employment agreement for a fixed term or by work. With this modification, 10 and 5 contributions are now required, respectively.
- The establishment of coverage for severance payments in the event of a state of constitutional exception of catastrophe due to a public calamity, the declaration of a zone affected by catastrophe, or a sanitary alert that implies the paralysis of activities in all or part of the country’s territory or of a geographical area.
The Law requires that employees who have been performing their duties within such territory and whose labor relationship has terminated before or during the period between such declaration and the last day of the following calendar month will be entitled to a maximum of 2 improved severance benefits. These amendments will become effective on 1 December 2023.
On the other hand, the Law adds to the Labour Code the employer’s duty to register in the web page of the Labour Department the information related to the imputation of the balances of the individual severance account (constituted by the contributions made by the employer) within 5 days after the signing of the release agreement. It must be a termination based on the legal grounds of “needs of the company” or “employer’s eviction.”
This obligation will become effective on the first day of the seventh month following its publication in the Official Gazette. This is the 1st of May 2024.
