40-Hour Labor Reform: What Businesses Need to Prepare with Odoo ERP

The labor reform to reduce working hours to 40 hours per week is becoming a hot topic in many countries, especially in Latin America. What do businesses need to prepare to both comply with new regulations and maintain production and business efficiency?

What is the 40-Hour Labor Reform?

The 40-hour labor reform refers to reducing standard working hours from 48 hours to 40 hours per week, equivalent to 8 hours per day for 5 working days. The goal is to improve workers’ quality of life, increase productivity, and reduce burnout.

In many countries, this proposal is being seriously discussed. Mexico, Colombia, and several Latin American countries are considering adopting this model in the next 2-3 years. Europe has already moved ahead, with many countries successfully implementing it for years.

Challenges for Businesses

Transitioning from 48 hours to 40 hours per week poses many challenges:

Increased labor costs: Businesses need to hire additional staff or pay higher overtime rates to maintain output.

Operational process changes: Work schedules, shifts, and staffing allocation need to be recalculated from scratch.

More complex time tracking: Traditional time clock systems are no longer suitable. Automated tools are needed for accurate management.

Legal compliance: Businesses must ensure full compliance with new regulations on working hours, rest periods, and worker rights.

How Odoo ERP Helps Businesses

Odoo ERP provides a comprehensive set of tools to help businesses prepare for and adapt to the 40-hour labor reform:

1. Centralized HR Management

Odoo’s Employees module allows centralized management of employee information, employment contracts, and work history. You can easily track actual working hours of each employee, detect violations of overtime regulations, and adjust staffing plans in a timely manner.

2. Automated Attendance

The Attendance module integrates with modern attendance devices, supporting fingerprint, card, or mobile app attendance. Data is synced in real-time to Odoo, helping to accurately calculate working hours, overtime, and leave.

3. Flexible Work Scheduling

The Planning module allows creating flexible work schedules, automatically assigning shifts based on skills, preferences, and legal regulations. The system automatically warns when schedules violate regulations on maximum working hours or minimum rest periods.

4. Automated Payroll

The Payroll module automatically calculates salaries based on attendance data, overtime hours, and allowances. The system automatically applies salary calculation rules according to new labor laws, ensuring accuracy and transparency.

5. Analytical Reports

Odoo provides real-time dashboards and analytical reports on employee productivity, labor costs, and legal compliance. Managers can easily make decisions based on accurate data.

Preparation Steps with Odoo

To prepare for the 40-hour labor reform, businesses should take the following steps:

Step 1: Audit current processes. Use Odoo to analyze current working hours, productivity, and labor cost data. Identify areas needing improvement.

Step 2: Digitize attendance. Move from manual attendance to an automated system with Odoo Attendance. Train employees on using the mobile app.

Step 3: Optimize work schedules. Use Odoo Planning to create optimal work schedules, balancing production needs and employee rights.

Step 4: Update salary policies. Reconfigure Odoo Payroll to apply new salary calculation rules, including overtime pay and allowances under the new law.

Step 5: Training and communication. Use Odoo eLearning to train employees on new processes, rights, and obligations under the labor reform.

Long-Term Benefits

Although the 40-hour labor reform poses short-term challenges, businesses that implement it properly will enjoy many long-term benefits:

Increased productivity: Well-rested employees work more efficiently, reducing errors and workplace accidents.

Talent retention: A balanced work environment helps attract and retain talented employees, reducing recruitment and training costs.

Legal compliance: Automated systems help businesses always comply with regulations, avoiding legal risks and violation penalties.

Improved brand image: Businesses that care about employee rights will have a positive image in the eyes of customers and partners.

Conclusion

The 40-hour labor reform is not just a challenge but an opportunity for businesses to modernize their HR management processes. Odoo ERP provides a comprehensive set of tools to help businesses prepare, adapt, and take advantage of this reform.

Businesses should start preparing now by auditing current processes, digitizing attendance, and optimizing work schedules with Odoo. Careful preparation will help businesses transition smoothly and benefit from the labor reform.

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Source: 40-hour labor reform: what it means for your business and how to prepare — Odoo Blog, October 2026