Minimum Working Conditions
Employers have a general duty as follows: to have in place all necessary tools and conditions to efficiently protect the life and health of all employees rendering services in its facilities, as well as to avoid labour accidents or diseases. Employers must inform their employees of the possible risks that they could face at the workplace.
The law considers as remuneration the cash payments and cash-equivalent benefits in kind that the employee receives from the employer on account of the employment agreement. The remuneration includes base salary, overtime payment, commissions, profit sharing and bonuses. The law further indicates that certain payments or allowances do not constitute remuneration, such as lunch, family allowance for each charge of the employee, transportation allowance, etc. The remuneration must be paid in the agreed fixed period, which cannot exceed one month. However, in the case of variable remunerations, this variable remuneration or commission is usually paid monthly, bimonthly or quarterly. Other payments which depend on the quarterly or yearly results of the company, i.e. bonuses and profit sharing, are paid at the end of the quarter or business year, respectively.
The amount of remuneration can be freely agreed between the employer and the employee. However, the law sets a minimum level, which in the case of the monthly base salary for employees working 45-hour weekly cannot be lower than one legal monthly minimum wage (CL$326,500; US$425 approximately), as from 1 September 2020.
Under the provisions of the Chilean Labour Code, if a company earns profits, it must share part of them with its personnel. The law stipulates that companies must distribute 30% of net profit to the employees, calculated in proportion to the employee’s salary. The basis used to determine profits is the corporate taxable income (subject to certain adjustments) less 10% of net equity. However and in lieu of the above obligation, the employer may pay a bonus of 25% of the yearly salary, but the bonus in this case, regardless of the level of salary of the employee, cannot exceed 4.75 monthly minimum wages (at present app.CL$1.550.875; US$2,015). The company and the employees may agree on a profit-sharing system different from those described above, provided the payment to the employee is not lower than the two alternatives mentioned above.
Maximum Working Week
The normal workweek is limited to a maximum of 45 hours. This maximum must be worked in no less than five and no more than six consecutive days. The normal workday shall not exceed 10 hours. The workday must be divided into two periods, leaving between them at least a half-hour break for lunch, which must not be considered for the purposes of determining the workday. The law also indicates some cases in which the rest period is longer, i.e. restaurants, hotels and club employees. Working hour limits do not apply to employees who work for different employers; to managers or administrators, or to employees who work without immediate superior supervision or outside the working premises, factory, etc. Said limits do not apply to employees who are hired to work outside the office using telecommunication or computing media; nor do they apply to employees whose activities are not of a steady nature or require only their presence. There is also an exception regarding stores or commercial establishments which, in days immediately prior to Christmas or national holidays, may extend the workday by two hours. In these cases, the hours in excess of the 45-hour maximum will be paid as overtime.
Part-Time Work Week
The Labour Code regulates a special contract known as a “part-time” contract. The part-time week duration cannot exceed 30 hours per week. According to Chilean law, part-time jobs are subject to the same provisions applicable to regular jobs, with the following exceptions: i) the maximum profit-sharing payment can be reduced in accordance with the number of hours worked, and ii) the parties are able to agree on different alternatives for workweek distribution, thus allowing the employer to choose between said alternatives and select the one that will be used during the following week or period.
Overtime, which is defined as the time worked by the employee in excess of the legal or agreed workday, if shorter – shall be agreed only to take care of necessities or temporary situations of the company, which include all circumstances that, while not permanent in the company’s productive activity and deriving from occasional events or from unavoidable factors, imply a greater work demand in a certain amount of time (but not more than 2 overtime hours per day). Overtime work agreements shall be evidenced in writing and be temporarily effective over a period not exceeding three months, renewable by agreement of the parties. However, the permanence of the circumstances that originated them, which by no means shall affect the occasional character of the overtime work, will determine the limit for its renewals. Overtime must be paid with a 50% surcharge.
Employer’s Obligation to Provide a Healthy and Safe Workplace
The Employees’ Compensation Insurance Law established under Law Nr. 16,744 states the obligation for companies or establishments with more than 25 employees to create a Permanent Safety, Hygiene and Risk Prevention Committee (Comité Paritario), comprising representatives of both employers and employees. This committee is responsible for the adoption of all measures necessary to avoid work-related accidents and for recommending the proper use of the safety gear available. None of the employees’ representatives in this committee can be dismissed while sitting on the committee, without prior authorisation of the labour courts.
when suffering a labour accident or professional disease that could imply an employer´s responsibility.
Protection from Retaliation
The Labour Code contains specific rules and sanctions against retaliation: labour fines; additional severance; and even allows for an affected employee to choose between severance or reinstatement at work, if he/she was terminated under serious discriminatory circumstances.