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FAQs on Minimum Wages in Chile

by Khushi Mehta — last modified Feb 17, 2012 09:22 AM

 

Minimum Wages  As per Law In practise
Is there a separate legislation relating to minimum wages in Chile? There is no separate legislation on minimum wages in Chile. However, article 42 of Labour code, 2002 says that the basic salary of a worker should not be less than the minimum monthly income. More than 700 thousand workers earn less than the minimum wage, and 319 thousand labourers gain between 1 and 1.25 minimum wages.
Do one or more minimum wages exist that is/are determined by law? Yes, there exists more than one minimum wages as determined by law. Law 20449 (reset monthly minimum amount of income) declares three different rages of minimum wages.  
AT what level are minimum wages determined? Minimum wages are determined at national and level. Minimum wages in Chile do not vary with regions, so are declared at national level. However, Law 20449 declares minimum wages for different age groups as well (a) 18 - 65 yrs,  (b) both above 65 & below 18 and it also declares minimum monthly income for those who are (c) "non-remunerated"  
On what basis is minimum wage calculated? Minimum wage is calculated on monthly basis. Law 20449 (2010) declares monthly minimum amount of income.  
In case of weekly/monthly minimum age, are they based on any fixed number of hours? As per article 22 of the Labour Code, the duration of an ordinary working day should not exceed 45 hours per week. Article 28 of the labour code says that this weekly maximum limit shall not be distributed in more than 6 days and less than 5 days. So the average working hours a day comes out to be  7.5 hours (45/6). Article 44 of the labour code says that the remuneration may be fixed by time, unit, week, month but should not be less than minimum wage. 40 hours per week as a reference; not higher than 45.
Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting? Ministry of Finance & Ministry of Labour and Social Welfare, United Workers Central (CUT), National Union of Workers (UNT) and Centre for Public Studies, University of Chile are involved in setting minimum wages.  The minimum wage is fixed by the Chilean Congress, based on a government suggestion. The Ministry of Labour and Social Welfare has announced for the creation of "Technical Committee on Minimum Wages/Minimum Wage Advisory Commission". It will be composed of representatives of workers and employers, as well as economists and academics. However, there is no law that legalizes the existence of such committee.  
How are upratings (adjustments) of minimum wages decided upon? The minimum wage is fixed by the Chilean Congress, based on a government suggestion based on the recommendations by a Technical Committee formed by labour representatives, academics and governmental representatives  
Which are the components of minimum wage in your Chile? Referring to the latest Law no 20449(readjusting monthly minimum amount of income), minimum wage rates are declared as a single fixed component.  
How frequently is the fixed component of minimum wages updated? Neither the Labour Code, 2002 nor various other Laws on readjusting minimum wages explicitly describe the interval for minimum wage revision. But, minimum wage in Chile is revised every year in the month of July as understood by Laws readjusting minimum wages being published every year in July.  
What is/are the yardstick/s on which minimum wage upratings are based? Neither the Labour Code nor the any other Law (readjusting minimum wage rates) describe the yardsticks or factors or a formula used to determine minimum wages. However, the Government has proposed the newly established Advisory Committee on minimum wages to include three key variable in minimum wage rate adjustments. these are : expected inflation for next 12 months, productivity and a cyclical adjustment factor depending upon conditions of unemployment. (Source: Chilean Government website)  
What is the national poverty line? (In national currency) National poverty line is 180 thousand pesos (Source: Ministry of Planning of Chile)  
How often is poverty line updated? Poverty line is undated between 6 months to one year  
When was poverty line last updated? (Specify YYYY/MM) Poverty line was last updated in 2010/07  
What is the percentage of minimum wage relative to the current poverty line? The percentage of minimum wage relative to the current poverty line is 95.56% (Calculation: National Minimum wage /National Poverty line)  
What is the incidence of minimum wages(s) in the national labour force (wage earners only)? The incidence of minimum wages in the national labour force (wage earners only) is 11 per cent of the working force.  
How is minimum wages compliance regulated? Ministry of Labour, Chile is responsible for compliance of all Labour Laws including minimum wages.  
Which legal sanctions can be applied in compliance is lacking? As per article 506 of labour code, violations of this code shall be punished with fines depending upon the severity of the infringement and size of firm.  
1Are sanctions often being applied? Not Applicable as per law When the Ministry of Labour inspectors find a violation, sanctions are applied.
Are employer and/or trade union representatives involved in compliance procedures? The labour code obliged trade unions to be involved in compliance procedures.  
To whom/Where can individuals complain, if they think they are earning less than minimum wage If somebody earns less than the minimum wage s(he) can complain to the labour inspectors. As per article 220 of the Labour Code, it is the function of trade union to ensure compliance of laws of work or social security, report their violations before administrative authorities. If somebody earns less than the minimum wage s(he) can complain to her(his) boss.

 

 

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