Advances in the Labour Reform towards a 40-hour working week

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In accordance with the legislative agenda, in the coming days the Chamber of Deputies is expected to approve the reform bill to Constitutional Article 123 on labour matters. Once this occurs, it must also be approved by the majority of local congresses and, subsequently, there will be a 90 day period to amend the Federal Labour Law.

What does it consist of?

Mainly, it consists of gradually reducing the working week from 48 to 40 hours as follows:

January 1st 2027 – maximum 46 hours
January 1st 2028 – maximum 44 hours
January 1st 2029 – maximum 42 hours
January 1st 2030 – maximum 40 hours

One of the aspects with the greatest impact for employers is that this reduction to 40 hours would not entail a decrease in workers’ pay. The initiative proposes that employees work fewer hours for the same salary and benefits, prohibiting any reduction thereof.

This would mean that overtime would be paid starting from hour 40:01 per week, and not from 49 hours as currently occurs, despite the rule of a maximum of 8 hours per day.

Likewise, the option of working up to 12 additional overtime hours per week is considered.

What implications could it have?

Payment of overtime.
Payment for work on rest days, representing +200% of salary.
Where applicable, an increase in social charges derived from overtime and rest‑day payments, in order to maintain current production levels.
Where applicable, an increase in payroll tax due to the payment of overtime and work on rest days.
Hiring of additional personnel as a result of the reduced time available per worker.
General increase in labour costs.
Adjustments to time‑recording devices and systems.
Modifications to payroll systems.
Changes to employment contracts, among others.

Who would this reform affect/benefit?

Employers and millions of workers across all sectors who currently work more than 40 hours per week as part of their standard working week. It is also expected to benefit those who remain at the disposal of their employers outside working hours.