Hire in Chile

EOR in Chile

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Chile, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Chile ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Chile and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Chile

The employment relationship in Chile is governed principally by the Labor Code, although other statutes such as the Political Constitution of 1980, Decree Law No. 3,500 regarding pensions, and Law No. 16,744 regarding labor accidents also apply.

Under the Labor Code, employers and employees must enter into a written employment contract.

Employment contracts in Chile

As you look to hire employees in Chile, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The maximum permissible workweek is six days or 45 hours, and the maximum workday is 10 hours.

A 30-minute break in the workday is required and Sunday is a required rest day. Work on Sundays and holidays is generally prohibited except for essential services and certain other exceptions.

An amendment to the labor code reduces working week hours from 45 to 40 hours under a gradual reduction scheme. Effective Apr. 26, 2024, the workweek will be reduced to 44 hours.

In 2026, the working schedule will be reduced to 42 hours. In 2028, the workweek will be reduced to 40 hours.

Workers may work only two hours of overtime per day; the total number of hours worked per day, including overtime, may not exceed 10.

Work performed on public holidays is treated as overtime.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• Effective July 1, 2024, the monthly minimum wage has been raised from 460,000 to 500,000 Chilean pesos.
• Effective July 1, 2024, the minimum monthly wage for workers under 18 and over 65 is 372,989 Chilean pesos (US$392.83).
• Effective July 1, 2024, the minimum monthly wage for non-remuneration purposes at 322,295 pesos (US$338.35).
• The monthly income limits for the family and maternal allowances under the single-family benefit system has been increased.
• If work is required on a Sunday, the worker receives a 30% wage premium.
• The overtime pay rate is 150% of the normal hourly wage and must be paid when work exceeds eight hours per day or 45 hours per week.
• Terminated employees must be paid for unused vacation days.

As your employer of record in Chile, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

The Labor Code requires employers to distribute 30% of their net income to employees each fiscal year as a profit-sharing bonus.

While not legally required, many Chilean employers customarily pay employees an annual bonus equal to one month’s salary and paid either in two installments, September and December, or in one installment in December. This is in addition to the annual profit-sharing payment.

Probationary period

Legislation doesn't allow for trial periods (except for domestic workers).

Termination and severance

Chile abolished the concept of dismissal without cause in 1990. An employer may dismiss a worker only for misconduct or for failure to meet the requirements of the undertaking.

In cases where employees are dismissed due to the needs of the company (i.e., changes in market conditions or the economy), the employer must provide 30 days' written notice to the worker unless it pays the employee compensation equivalent to 30 days’ work.

The employee must be notified of the termination in writing, in person, or by registered letter sent to the address in the contract of employment within three working days of the separation.

An employee who resigns must give the employer 30 days’ notice.

Compensation on termination is payable (unless an individual or collective agreement is made with more favorable terms) equivalent to 30 days of the last monthly compensation earned for each year of service worked and a fraction greater than six months. If a dismissal for misconduct is declared unjustified, unfair, or unlawful, compensation may be further increased by up to 150%.

Employee benefits and paid leave in Chile

When negotiating terms of an employment contract with a candidate in Chile, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Female employees get maternity leave of 6 weeks before the expected date of childbirth and 12 weeks after delivery, paid from a government or private healthcare insurance fund.

Depending on the child’s condition, the leave may be extended to 18 weeks. Further, leave of 7 days for an additional child is provided for multiple births. Leave can be extended for up to 1 year in case of serious health conditions and both parents can split it between them.

The same leave policies apply to adoptive parents.

Vacation

Employers provide paid annual leave of 15 days to most workers who have completed at least 1 year of service, although employees who work in Chile’s 11th or 12th regions, and in the province of Palena in the 10th region, are entitled to 20 days of vacation.

Employees who have completed 9 months of service, but not yet a full year, qualify for 11.3 days of paid leave. Employees who have worked 10 or more years for one or more employers are entitled to an additional day as annual leave in every 3 years of employment. Annual leave must include at least 10 consecutive days.

Unused leaves can be carried over for up to 2 years and may get encashed as mutually agreed by the employer and employee.

Holidays

The following paid public holidays are observed in Chile:

• New Year’s Day
• Good Friday
• Holy Saturday
• Labor Day
• Navy Day
• Date of the Southern Winter Solstice: National Indigenous Peoples’ Day
• Holiday of Sts. Peter & Paul
• Holiday of Our Lady of Mount Carmel
• Holiday of the Assumption of Mary
• Two-day national holiday and Army Day (moved to Monday and Tuesday or Thursday and Friday if one of the days falls on Wednesday)
• Columbus Day
• Reformation Day
• All Saints’ Day
• Holiday of the Immaculate Conception
• Christmas
• Bank holiday (typically a shortened workday but not a full holiday in other sectors)

States and territories can add to the days on this list or substitute others in their places. Companies authorized to work on holidays must give employees a day off in compensation for every holiday worked.

Sick leave

Employees who have taken part in a government health insurance program for at least 6 months and made contributions for a minimum of 3 months are entitled to receive government-paid sick leave after they miss their fourth day at work. If the sick leave extends longer than 10 days, pay applies retroactively to the first day of missed work.

Employers may provide extra coverage if payments to the national health insurance are lower than the employee’s remuneration.

Health coverage

Chile’s social insurance system provides old-age, disability, and survivors’ pensions. Mandatory individual accounts are required for employees who entered the labor force after December 31, 1982; coverage is voluntary for those who entered the workforce earlier.

Workers are eligible to request a basic state pension at age 65 (men) or 60 (women). Early retirement is possible for those who attain a sufficient account balance before they reach the usual retirement age and for those who have worked under arduous conditions.

Additional benefits

In addition to healthcare benefits, employees in Chile are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Chile, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: July 04, 2024

Employee onboarding with an employer of record in Chile

We write and validate all local employment contracts, streamlining the onboarding process for you and your Chile employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Chile, we will:

• Schedule a welcome call to discuss HR and employment information for Chile, as well as answer any questions
• Prepare a customized employment contract in English or other local language
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Chile employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Chile. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.