On July 12th, 2018 the Chilean House of Representatives approved a bill that would create an employment statute for people ages 18-28 years old who are studying or in the process of obtaining their degree which would allow them to be able to work while still adhering to their academic obligations. The idea behind this bill is to reduce the high rates of youth unemployment that currently exist in Chile.
What are the requirements for this Statute of Employment?
In order to qualify for this Statute, you must be within the designated age range and be a current student or a prospective student. The employee must verify with the employer his/her student status within 120 days of the closing the contract. Additionally, the employee’s student status must be verified once a year for as long as the employment relationship is maintained. This obligation will be temporarily granted if the employee presents a voucher indicating that the respective verification certificate is in process. It should be noted that this certificate of verification must be attached to the employment contract.
What are the main modifications?
The bill incorporates a new chapter into the Labor Code called “The alternative contract of the working student”. This allows the contract of people who meet the requirements described above to work under the following conditions:
- The student’s work schedule cannot exceed 30 hours per week. This may be distributed on a continuous or discontinuous basis, establishing certain limits, without the possibility of overtime. Additionally, it allows the employee to come to an agreement directly with the employer in order to be able to work on Sundays and holidays.
- Student employees will be entitled to unpaid leaves of absences when they are required to take exams or when they want to take vacation. The employee can do this by suspending the contract for up to two months. Alternatively the employee can agree to a work schedule of 45 hours per week in order to make-up for the lost time, in turn the employee would not lose the minimum monthly wage agreed upon in the work contract.
- The salary will not be considered as income for the purpose of determining the students’ socioeconomic status or that of their family background. This is so that the student can continue to apply for scholarships, loans, and other benefits.
- On the other hand, those students who are still labeled with a dependent socioeconomic status from their parents or guardians may choose to remain on their respective health plans and not be forced to adopt those offered through the employer. The student employee and employer are still required to pay into the mandatory pension and workers compensation insurance funds.
- Lastly, once the student employee finishes studying or reaches the age of 29, the current student employment contract will end. At this time, the general rules of the Chilean Labor Code will be applied the contract and the employee will no longer have the student employee status.
This bill has had some criticism. For instance, what will happen to employees who have immunity? Will the contracts that are created under this bill assimilate fluidly after the employee completes their studies or at age 29 and continues to work for the company under a regular employment contract? The vast majority of these concerns have been resolved during the discussion stage in the House of Representatives. Although, these subjects have been addressed during the initial drafting of the bill, today nothing is mentioned about them. These concerns are considered to fall under the general rules of the Chilean Labor Code because of their supplementary nature.
On the other hand, will there be rules protecting employees who want to continue with their original contract or agree to existing contractual obligations? What is the punishment for people who are hired under the student employee contract that do not actually qualify for it? Will there be a maximum percentage of staff who can be employed with this contract? Once the bill is passed onto the Senate, hopefully we will receive answers to these types of questions.