April 2, 2020
Official Information

President Piñera enacts Guaranteed Minimum Wage Law: “This is a significant relief for some 700,000 workers”

President Piñera enacts Guaranteed Minimum Wage Law: “This is a significant relief for some 700,000 workers”
The bill creates a subsidy to complement lower-income workers’ salaries that will benefit 670,000 workers. Those who earned the minimum wage in February are eligible for a subsidy of up to 59,200 Chilean pesos (around US$69).

President Sebastián Piñera enacted the law creating the Guaranteed Minimum Wage, a cornerstone of the Government’s social agenda, which directly benefits lower-income workers.

The bill sets up a subsidy to complement lower-income workers’ salaries. Those who earned the minimum wage (301,000 Chilean pesos - around US$350) in February are eligible for a subsidy of up to 59,200 pesos (around US$69). 

“This is a significant contribution to our country’s workers, especially the most vulnerable, who are of special concern to our Government,” said the President. He was speaking at an event in La Moneda Palace, where he was accompanied by Employment and Social Security Minister María José Zaldívar, Treasury Minister Ignacio Briones and Social Development Minister Sebastián Sichel. 

The tax-free subsidy goes directly into workers’ pockets and guarantees a net income of at least 300.000 Chilean pesos. This represents an increase in net income of up to 25% relative to the minimum wage in effect in February, the first month in which the benefit applies, and 18% of the minimum salary in effect as of March.

Furthermore, the benefit extends, on a decreasing scale, to those who earn up to 384,363 Chilean pesos (around US$446).

The initiative will benefit 670,000 workers, more than half of whom are women. About 80% of the beneficiaries are among the 60% poorest in society and two-thirds of them live outside of Santiago.

Subsidy payments will begin in May and cost the State about US$200 million in 2020.

The guaranteed minimum wage, like the employment and earnings protection law, is among the actions deployed by the Government to support families in the face of the challenges generated by the global coronavirus pandemic.

“I am sure that all Chileans will act with unity, discipline, and generosity and that together and united, we will get through this crisis,” said the President.