Table of Contents

Chile

Table of Contents

Currency

Chilean Peso (CLP)

Payroll Frequency

Monthly

Employer Taxes

4.39%

About Chile

Chile is a South American country that borders the South Pacific Ocean, and is located between Argentina and Peru. Chile has a market-oriented economy with high levels of foreign trade, boosted by the country’s strong sovereignty and sound policies. Chile’s economy relies agriculture, industries, and numerous natural resources such as copper that have resulted in strong economic success recently.

Chile’s population, comprised of whites, the non-indigenous and the Mapuche, all enjoy high living standards in one of South America’s most economically prosperous and socially stable nations. Most Chileans speak Spanish and are Roman Catholics by faith. The country’s culture is influenced by a mix of both Spanish and Mapuche traditions.

As one of the longest north-south countries in the world, Chile’s climate is varied with the world’s driest desert, the Atacama, to its north, a Mediterranean climate in its center, a humid sub-tropical one on Easter Island, to alpine and tundra regions in the east and south.

Employment Relationship

• Permanent Employment

Employees hired for an indefinite term are regarded as permanent employees. In case of fixed-term contracts, if an employee has continued working after contract expiration without renewal, he/she is considered to have been hired for an indefinite time. In addition, an employee who has provided discontinuous services by virtue of more than 2 term contracts, for 12 months or more in a period of 15 months, counted from the first contract, will be legally presumed to have been hired for an indefinite duration.

• Fixed-Term or Specific-Purpose Contracts

Labor law limits fixed-term contracts to one year, renewable for another term. If the employee continues after expiration without renewal, he/she is considered to have been hired for an indefinite term. Contracts renewed twice are considered to be made for indefinite term. The duration of fixed-term contracts can be more than two years for managers, professionals or technical staff.

• Temporary Employment Contratcs

A temporary employment contract can be concluded, only for certain cases, such as leave substitution, special events, expansion of facilities, etc. An employer (user) can hire temporary workers from temporary services agencies by concluding a written contract. This contract must include the rights and duties of hired employees, along with reasons for hiring temporary workers, jobs for which they are hired, their duration and agreed fee. 

Probationary Period

The duration of the probationary period in Chile without prior agreement is 2 weeks by default. During this time, either party to the employment contract may terminate the relationship with 3 days' notice. 

Working Hours

Per Chilean labor law, the standard workweek is 44 hours, and the ordinary workday cannot exceed 10 hours. This is transitionary, and in 2028 the work week will decrease to 40 hours per week. Employees working longer are eligible for overtime. The maximum weekly hours cannot be distributed in more than 6 or less than 4 days. Overtime work can be required in extraordinary situations to avoid damages in the ordinary course of work, to prevent accidents, or to make urgent repairs to machinery. Employees and employers are required to include the modalities of remote work in their employment contracts. All remote work contracts must be registered with the Labor Department within 15 days. Remote work is subject to the regulations related to general working hours. 

Holidays / PTO

• Statutory Holidays

New Year’s Day – January 1Assumption Day – August 15All Saints’ Day – November 1Virgins Day – December 8Christmas Day – December 25Ascension of the Lord of Corpus Cristi – Date subject to change every yearNational Independence Day – September 18Army Day – September 19Navy Day – May 21

• Paid Annual Leave

The Labor Code of Chile entitles employees to an annual leave of 15 days with full salary after a full year of service with their employer. The leave time adds up to 21 consecutive days (including weekends) or a total of three weeks. Fixed-term employees who provide continuous services to the same employer by virtue of two or more contracts that exceed one year are also entitled to the same annual leave. Employees with over ten years of experience receive one extra day of annual leave for every three years of service beyond ten years. The annual leave can be broken into segments, with one of the parts being at least ten days. If an employee has two consecutive periods of vacations lined up, the employer must instruct the employee to take a minimum of 15 days off from work before the end of the year.

• Sick Leave

The Chilean Labor Code entitles employees to 8 days of unpaid sickness leave if they have worked for less than 6 months. Employees who have worked more than 6 months but less than a year are entitled to 15 days of unpaid sick leave. Employees who have worked 12 months or more are entitled to 30 days of unpaid sick leave.

• Maternity Leave

The labor code of Chile entitles female employees to a maternity leave of six weeks before delivery and 12 weeks after delivery. The benefits for this leave is paid by social insurance. To qualify for maternity benefits from social insurance or mandatory private insurance, employees must have at least six months of contributions, including at least three months of contributions in the last six months. There is a maternal subsidy for women without a valid employment contract, paid by the Social Security Superintendence. 

• Paternity Leave

The labor code of Chile provides a paid paternity leave of five days to employees, which can be used continuously or distributed within the first month of the birth of child. If the mother died during childbirth or during the period of maternity leave after it, remaining leave is transferred to the father or to whomever custody of the minor was granted  

Termination of Employment

• Notice Period

The Labor Code of Chile requires a notice period of 30 working days to an employee for dismissal due to business reasons. The notice must be in writing and clearly indicate the reason for dismissal. A copy is to be sent to the Labor Inspector. The notice period can be waived off by paying salary in lieu of notice.

• Severance Benefits

The labor code of Chile entitles dismissed employees who have completed at least one year of service to severance pay equal to one month of salary for each year of work, limited to 11 months’ salary. Employees must be dismissed by their employer for business reasons to be eligible for severance.