Employ Candidates Compliantly in Chile

Get Express Quote
  1. Overview: Chile
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
Other counrtries

Global HR Compliance in Сhile

If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Chile Guide below will help you understand the nuances of labor legislation in the country.

When the company is planning to enter a new foreign market of Chile and has a need to employ a local national there, the first question to answer is how it is going to make local hires.

We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.

This solution helps you employ your global sales force in Chile as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.

Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.

So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Chile instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.

Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.

Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Chile .

We are experts in global workforce employment in Chile, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Chile.

See Hiring and Firing Workforce in Chile Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Chile or would like to get more details.

Hiring and Firing in Chile Guide

Chile stands out among South America countries for its active foreign trade, solid financial institutions and sound policy, social protection. Should Chile be your business destination, here are some insights on your Chilean staff on-boarding.

# Employment Agreements

Types of employment agreements 

  • Permanent employment contracts
  • Casual employment contracts
  • Fixed-term contracts

The parties may either agree on an indefinite contract or places limits on terms (to the completion of a particular job to be performed by the employee, or else agree on a fixed period of time). In this last case, the contract’s term cannot exceed one year, or two years in the case of managers, professionals and technicians. However, local law allows term extension, (which cannot surpass the overall time previously mentioned). If the employee continues rendering services for the same employer after the contract term’s expiration, it will automatically become indefinite.

# Employment Termination and Severance Pay (Dismissal)

The Labor Code establishes provisions regarding the termination of the labor contract and employment stability. Under this statute the labor contract may only be terminated by agreement of both employer and employee, by the employee’s resignation, by the death of the employee, by the expiry of the fixed term agreed upon in the contract, by the completion of the work for which the employee was hired, by an act of God or circumstances beyond the control of the parties (force majeure) and upon dismissal by the employer.
The employment contract may be terminated by the employer on the grounds of business necessity, such as those arising from the rationalization and modernization of the business, low productivity, changes in market conditions or the economy, that make it necessary to dismiss one or more workers. However, the employment contracts of employees who have the power to represent their employer (such as managers, deputy managers, agents or attorneys of the law), or who have been granted general powers of management may be terminated without invoking any cause.

#Notice period

When the relationship is terminated for reasons associated with the needs of the company, the employer must inform the employee in writing about the termination of the contract one month in advance, unless the employer pays compensation equivalent to 30 days of work. The period of notice or payment of compensation is not required if the employer invokes the grounds for termination set forth in the Labor Code, including gross misconduct or dishonesty and other serious violations of the contract as described above. If the termination occurs based on the needs of the company or the reasons set forth in the Labor Code, or without invoking any cause, the employer must personally or by certified mail send the employee a written notice informing them of the termination of the employment contract. The employer must indicate in the notice the grounds invoked and the facts on which the termination of the contract is based.

#Severance payments

When the relationship is terminated for reasons of needs of the business or without invoking any of the reasons, the employer must pay compensation to employees based on the number of years worked. The calculation of compensation is the payment of one month’s salary for every year worked, with two limitations: the payment may not be greater than the equivalent of 11 months’ salary, and the amount of the base salary for the calculation of compensation may not exceed 90 units indexed to inflation. The above is applicable to open-ended contracts. However, if the employment contract is for a fixed term, the compensation to be paid corresponds to the wages to be paid until the end date of the contract with a limit of one year. In the case of professionals, this limit may be extended up to two years. For the purpose of payment of compensation for termination of the contract, the employer must take into account everything that the employee has received on the date of termination of the employment contract, including social security contributions, bonuses, or items worth money, excluding from the benefits that the worker has received from time to time. As mentioned previously, it should be noted that there are some reasons in Chilean law that allow the employer to terminate the employment relationship without the obligation to pay the above amounts, as with a violation of the provisions of the employment contract by the employee.

#Employee Benefits and Contributions

The Social Security system covers all employees, including independent employees. The latter are legally obliged to contribute to a mandatory insurance that covers old age, disability and survivorship insurance. In the case of foreign employees, as a general rule, they must also pay social security contributions as indicated above.

#Probationary period

The Labor Code does not provide for a probationary period except in the case of domestic workers, who may have a probationary period of two weeks at the outset of employment.

#Overtime

All employees who are not excluded from the ordinary workday limits (discussed in previous title), are entitled to the payment of overtime. This payment is calculated at the rate of 1.5 times the hourly wage for ordinary work. An employee can work a maximum of two overtime hours per day.

Work hours

The Labor Code provides for a maximum work schedule of 45 hours per week, distributed over no more than six and no fewer than five days. The following types of employees may be excluded from the general hours of work requirement:

  • Managers, administrators, legal representatives with administrative powers, and all those who work without direct supervision.
  • Workers hired to provide services from their own home, or in a place freely chosen by them and
  • Agents, brokers and insurance agents, traveling salesmen, collectors and similar workers who do not exercise their functions on site at the employer’s establishment.

In all other cases, an employee cannot choose to be excluded from those restrictions or limitations.

#Annual Leave

Employees who have worked for more than one year have the right to an annual paid vacation of 15 working days. After working ten years, continuously or not, for the same or different employers, vacations are extended by one working day for every three years of service. In case of employees who work in the 11th and 12th Regions of the country and the province of Palena, the basic vacation period is 20 days.

During the period of time in which an employee is engaged in military service, the employer must maintain the employee’s work without pay.

#Sick Leave

During the sick leave period, the employee will receive a wage equivalent to the amount that will be paid by its health insurance. Absences for work-related accidents will be paid by a special entity in charge of such accidents called “Mutual Security”. If an employee is sick longer than 10 days, they are not entitled to sick pay for the first three days they were out. However, if they are out less than 10 days, then they are paid from the first day. There are no set time limits for sick leave. The employer suspends payment of remuneration and the employee instead receives compensation from the relevant health insurance institution, but, subject to the monthly caps on remunerations used to calculate the social security contributions.

#Parental Leave

Maternity leave

Employees are entitled to paid maternity leave from six weeks before birth (prenatal maternity leave) and continuing 12 weeks after birth (maternity leave after delivery). Moreover, there is an additional 12-week “allowance” immediately after the completion of maternity leave after delivery during which workers receive the same subsidy as prenatal and postnatal leave. The employees can choose between this allowance and working half of their normal working hours for 18 weeks (part-time). If they choose the latter, they are entitled to receive 50% of their salary and all their variable compensation (e.g., commissions). An employee can also decide to transfer this allowance under the same alternative chosen to the child’s father, beginning on the seventh day of the week. The additional allowance mentioned above shall also apply to one of the parents (mother or father) of an adopted child.

Adoption: If an employee adopts a child under the age of six months, the employee is entitled to 12 weeks of maternity or paternity leave.

Paternity leave

Workers are entitled to leave of five working days, which they can use as they wish during the month following the birth. This paid leave is also granted in the case of adoption of a child.

Adoption: If an employee adopts a child under the age of six months, the employee is entitled to 12 weeks of maternity or paternity leave.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Chile by providing you with an Employer of Record solutions that allows you to jumpstart your global operations almost immediately, cost-effectively and compliantly.

Ready to Get Started?
Get Express Quote