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Last week, the Senate of the Republic approved the bill that seeks to reduce the working day in Colombia from 48 to 40 hours per week. This initiative, which belongs to the former president and senator Álvaro Uribe Vélez, will now be analyzed by the House of Representatives. (Read here: Endorsement by law that reduces weekly working hours from 48 to 45 hours)
This project aims for workers to have more time to share with their families, develop personal activities or continue their studies, so it does not seek to affect salary.
However, in a concept sent by the National Association of Entrepreneurs (Andi), he calculated that on average, to cover the eight hours not worked in the week, companies would have to bear an average weekly cost of $ 85,309 per person.
If this is multiplied by the 6.2 million employees who work more than 40 hours, it would leave an annual cost of $ 26.9 billion, equivalent to 2.7% of GDP. For the analysis, Andi used the assumption that companies will choose to hire more workers, for the same cost, to make up for the reduced hours, despite the fact that it is likely that many companies pay overtime and others simply put work on their own. employees.
Additionally, the union took into account that of the 22 million employed, only about half are salaried employees and, of these, about 7.6 million are formal, that is, they comply with the labor requirements required by law .
Among these, there are 6.25 million people who work more than 40 hours a week, that is, 81%. In addition, according to Andi’s calculations, each hour worked per week by 7.7 million formal wage earners is paid with $ 9,666.
“The change in working hours goes in the totally opposite direction to what it should. Job creation is becoming more expensive, competitiveness is being affected. Unfortunately that was not taken into account in the Senate today. The responsibility we have is great, “said Bruce Mac Master, president of the union.
Andi’s analysis warned that the results change depending on the sector in which the measure is applied. For example, in the industrial sector the cost will be higher since, according to the analysis, they will have to pay overtime as they tend to be tasks that require studies and training.
In addition, in sectors such as commerce or others, “which require customer service during specific hours, they will not have the administrative facility and, therefore, the incentive, to hire people for eight hours a week. These companies would also very surely opt for overtime pay ”. (Read here: Criticisms of the approval of the reduction of working hours)
Impact on job creation
The analysis carried out by Andi, and signed by Alberto Echavarría, Vice President of Legal and Social Affairs, also analyzed what the cost will be in job creation and warned that the sectors that generate the most jobs would have “a significant impact”, since the reduction of the working day does not necessarily imply the hiring of more workers, but the payment of additional costs.
“Many wage earners work, on average, more than 40 hours a week. This is the case, for example, of the industrial sector (46.3) and the commerce sector (48). The sectors that, on average, work less than 40 hours are also the sectors that find it easier to adjust to reduced hours, due to the fact that they do not have business hours, use of 24/7 machines, among other restrictions. This is, for example, the case of education ”, explained the analysis.
The union warned that these calculations do not take into account the impact that COVID-19 has had on the labor market, one of the main affected by the pandemic, since in April, May, June and July, 5.4 million were lost, 4.9 million, 4.3 million, and 4.2 million jobs, respectively.
“With all these figures, there is no doubt that, in this situation of sustained increase in unemployment, which is significantly worsened by the pandemic, it is not convenient to think about relative increases in labor costs,” the report adds.
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