News related to labour and payroll management in Chile. The Chilean Government has announced that it has reached an agreement with the Single Confederation of Workers (CUT) to increase the minimum wage in the country. In addition, the Ministry of Economy has announced that a subsidy will be launched for micro, small and medium-sized enterprises (MSMEs) to help them incorporate the increase.
The raise of 14.3% constitutes the largest single increase in thirty years, and will occur in two tranches to reach the new rate of 400,000 Chilean pesos per month: the first in May 2022 (where it rises CHP30,000 from the current CHP350,000) and a second in August 2022 (where it rises an additional CHP20,000). In addition, the government has confirmed that the agreement includes a proviso – should the Consumer Price Index exceed 7% in the 12 months to December 2022, the minimum income will increase again, to CHP410,000 from January 2023.
In an effort to help MSMEs cover the costs of this new minimum wage, it was announced that MSMEs will receive a subsidy of CHP22,000 for each worker who received the minimum wage in the months prior to May 2022. This amount will be available between the months of May and December 2022. Between January and April 2023, the subsidy amount will be maintained as long as the minimum wage is CHP400,000. If the minimum wage is readjusted to 410,000 pesos, the subsidy per worker will increase to CHP32,000.
The raise of 14.3% constitutes the largest single increase in thirty years, and will occur in two tranches to reach the new rate of 400,000 Chilean pesos per month
According to government sources, this minimum wage increase will benefit more than 800,000,000 people.
This measure is part of other labour initiatives the Government plans to implement, such as reducing the working week from the current 48 hours to 40. An official working group will be established to design and negotiate how this will work.
Our expert team in Chile is at your disposal should you wish to know more, or would like information on how this will affect your Chilean operations.
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