Chile
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
$ 410000 CLP per month
Labor Law
Laws that regulate Labor Relationship
• Political Constitution of the Republic of Chile
• Labor Code (CT- Codigo de trabajo)
• Law 21.015
• Law 20.545
• Law 20.137
• Law 20.012
• Law 20.005
• Law 19728
• Law 16.744
Onboarding guide
Requirements for a labor contract
• Place and date of the contract;
• Identification of the parties with the indication of the nationality, domicile, and e-mail address of both parties, if any, and dates of birth and income of the worker;
• Determination of the nature of the services and the place or city where they are to be rendered. The contract may indicate two or more specific functions, whether alternative or complementary;
• Amount, form, and period of payment of the agreed upon remuneration;
• Duration and distribution of the working day, unless the company has a shift work system, in which case the provisions of the internal regulations shall apply;
• Term of the contract
• Other agreements agreed upon by the parties. The additional benefits to be provided by the employer in the form of housing, electricity, fuel, food, or other benefits in kind or services, as the case may be, shall also be indicated. When for the hiring of a worker a change of domicile is required, the place of origin of the worker must be recorded. If the nature of the services requires the displacement of the worker, the place of work shall be understood to be the entire geographical area covered by the activity of the company. This rule shall apply especially to travelers and workers of transport companies.
Article 10, Labor Code
Pre-hire Medical exam
Not mandatory
Types of contracts
•Indefinite
•Temporary Work or Task Contract
•Part- time Contract
•Apprenticeship contract
Probation Period
There is no provision for probation period in the Labor Code. However, for domestic workers, the first two weeks of work are considered as a trial period and during that period, the contract may be terminated at the will of either party, as long as they give at least three days’ notice. in advance, and pay for the time served.
Art. 147 of the Labor Code
Are offer letters mandatory in the country?
Not Mandatory
Are digital signatures in labor contracts valid?
Permitted
Mandatory onboarding documents
• JR worker file
• ID card
• Single Tax Role
Statutory benefits
Annual Bonus
There is no legislation regulating the Annual bonus, however, companies usually pay one amount in September (national holidays) and another in December (Christmas).
Additional bonus
Companies that pursue profit, will have the obligation to annually reward its workers in a proportion not less than 30% of the profits or surpluses. This obligation is annual.
• Even so, legally and commonly what is done by companies, is to pay 25% of the accrued in the respective commercial year for monthly remuneration.
• In other words, 25% of the employee’s gross salary is paid. It is also possible to opt for another modality by the employer, this is, in case 25% of the base salary exceeds 4.75 times the minimum monthly income the bonus to be received would be $ 119,146 (with a minimum salary of 01-03-2019).
Leaves (medical, maternity, paternity, etc.)
• Maternity leave: leave of six weeks before and twelve weeks after childbirth, according to Article 195 of the Labor Code, and shall also be entitled to postnatal parental leave of twelve weeks following the postnatal period, during which they shall receive an allowance calculated on the same basis as the allowance for maternity leave referred to in the first paragraph of Article 195. However, the worker may return to work at the end of her postnatal leave for half of her working day, in which case the postnatal parental leave shall be extended to eighteen weeks under article 197.
• Paternity leave: 5 days, can be taken consecutively or distributed during the first month of the baby’s life. The same is the case for adoption.
• Bereavement Leave: If a member of the employee’s immediate family passes away, the employee is entitled to 3 days of paid leave.
Annual Leave (days per year)
Workers with more than one year of service will be entitled to an annual holiday of fifteen working days, with full compensation that will be granted under the formalities established by the regulation.
During the holiday, the full remuneration will be constituted by the salary in the case of workers subject to the fixed remuneration system. In the case of workers with variable remuneration, the full remuneration will be the average earned in the last three months of working.
How do vacation days expire?
In the event of termination of the contract before vacation, the employee are entitled to proportional vacation compensation if there is a termination before the completion of one year of service.
Article 73, Labor Code.
Official Holidays
•1 Jan, New Year’s Day
•2 Jan, New Year Holiday
•7 Apr, Good Friday
•8 Apr, Easter Saturday
•1 May, Labor Day
•21 May, Navy Day
•21 Jun, National Day of Indigenous Peoples
•26 Jun, Feast of St Peter and St Paul
•16 Jul, Our Lady of Mount Carmel
•15 Aug, Assumption Day
•18 Sep, Independence Day
•19 Sep, Army Day
•9 Oct, Day of the Race
•27 Oct, Reformation Day
•1 Nov, All Saints’ Day
•8 Dec, Immaculate Conception
•25 Dec, Christmas Day
Working on holidays and Sundays
Paid at 50% extra on top of the regular wage.
Number of Working hours
8 hours a day, not exceeding 45 hours a week or 10 hours a day.
The weekly maximum may not be distributed in more than six or less than five days.
Overtime
Paid at 50% extra on top of the regular wage. Overtime is permitted up to 10 hours a day or 45 hours a week
Social Security (what does it cover)
• Disability and Survival Insurance (AFP)
• Disability and Survival (SIS- AFP)
• Diseases ATEP
Payroll
Salary payment currency
Chilean Peso (CLP)
Can salary be paid in a different currency other than the local currency?
No.
Payment frequency
Monthly.
VAT percentage
19.00%
Income Tax
Residents and non-residents are taxed at progressive income tax rates ranging from 5% to 35.50% For more information see https://taxsummaries.pwc.com/chile/individual/taxes-on-personal-income
Tax Payer Identification Number
• National Single Role – RUN (Rol Único Nacional)
• Single Tax Role – RUT (Rol Único Tributario)
Offboarding
Voluntary resignation
Resignation of the employee, giving at least thirty notice’ days to the employer. The severance payment shall be granted by the employer and its payment shall be made available to the employee within ten working days, counted from the employee’s separation. The parties may agree on payment in installments in accordance with articles 63 bis and 169.
Contract termination
The employment contract will end in the following cases:
• Mutual agreement
• Resignation of the employee, with 30 days of prior notification
• Death of the employee
• Expiration of the agreed term in the contract
• Conclusion of the work or service that gave rise to the contract
• Fortuitous events.
Art 167. Labor Code.
Justified Dismissal
According to the Labor Code, Art. 160, the employment contract terminates without the right to any indemnity when the employer terminates it by invoking one or more of the following causes:
• Any of the misconduct of a serious nature, duly proven, as indicated below:
a) Lack of probity of the employee in the performance of his duties;
b) Conduct of sexual harassment;
c) Acts of fact exercised by the employee against the employer or any other employee working in the same company;
d) Insults made by the employee to the employer;
e) Immoral conduct of the employee that affects the company where he/she works; and
f) Harassment in the workplace.
• Negotiations carried out by the employee within the line of business and which have been forbidden in writing in the respective contract by the employer.
• Non-attendance of the employee at work without a justified cause for two consecutive days, two Mondays in a month or a total of three days during the same period of time; likewise, the unjustified absence or without prior notice of the employee who is in charge of an activity, task or machine whose abandonment or stoppage means a serious disturbance in the progress of the work.
• Abandonment of the work by the worker, understood as such:
a) the untimely and unjustified departure of the worker from the site of the work and during working hours, without the permission of the employer or his representative, and.
b) the refusal to work without just cause in the tasks agreed upon in the contract.
• Reckless acts, omissions or imprudence that affect the safety or operation of the establishment, the safety or activity of the workers, or their health.
• Material damage intentionally caused to the installations, machinery, tools, work tools, products or merchandise, work tools, products or merchandise.
• Serious non-compliance with the obligations imposed by the contract.
Unjustified Dismissal
• According to the Labor Code, Art. 168, the employee whose contract is terminated by application of one or more of the grounds set forth in Articles 159, 160 and 161, and who considers that such application is unjustified, undue or improper, or that no legal grounds have been invoked, may appeal to the competent court, within sixty working days, counted from the termination, in order to have it so declared. In this case, the judge shall order the payment of the indemnity referred to in the fourth paragraph of article 162 and that of the first or second paragraphs of article 163, as the case may be, the latter increased according to the following rules:
a) By thirty percent, if it has been terminated by improper application of article 161;
b) By fifty percent, if the termination has been terminated for unjustified application of the grounds of article 159 or no legal cause for such termination has been invoked;
• If the employer has invoked the grounds set forth in numbers 1, 5 and 6 of Article 160 and the dismissal is also declared by the court to lack a plausible reason, the indemnity set forth in the first or second paragraphs of Article 163, as the case may be, shall be increased by one hundred percent.
• In the case of complaints of sexual harassment, the employer who has complied with his obligation under the terms set forth in article 153, second paragraph, and Title IV of Book II, shall not be subject to the surcharge on the indemnity payable in the event that the dismissal is declared unfair, improper or unjustified.
• If the judge establishes that the application of one or more of the causes for termination of the contract established in Articles 159 and 160 has not been accredited, in accordance with the provisions of this Article, it shall be understood that the termination of the contract has occurred due to one of the causes indicated in Article 161, on the date on which the cause was invoked, and there shall be a right to the corresponding legal increments in accordance with the provisions of the preceding paragraphs.
• The term referred to in the first paragraph shall be suspended when, within this period, the employee files a claim for any of the causes indicated before the respective Labor Inspection. Said term shall continue to run once this procedure has been concluded before said Inspection. Notwithstanding the foregoing, in no case may recourse be had to the court after ninety working days have elapsed since the employee’s from the employee’s dismissal.
Compensation:
For unjustified dismissal:
If the contract has been valid for a year or more and the employer terminates it under article 161 of the Labor Code, the worker must pay compensation for years of service that the parties have agreed individually or collectively, the employer must pay the worker a compensation equal to 30 of the last monthly remuneration for each year of service and fraction greater than six months, provided continuously. This compensation will have a maximum limit of 330 remunerations. The employer will have to pay the provision of the holidays as well that the employee was entitled to at the time of the termination. The contract concluded for a specific work or task has been in force for a month or more, the employer may terminate it justifiably as long as it pays the worker, at the time of its termination, compensation equivalent to 2.5 days of remuneration for each month worked and a fraction greater than fifteen days. (CDT. Art. 163)
Minimum Notice Period
Notice period is 1 month by law.
Immigration
Visa process
1. The candidate gather all the required documents and send them to us
2. We Submit the application
3. Once the work visa has been processed, the embassy/consulate will require the applicant attend in person to get it stamped on the employee’s passport.
Work visas have a maximum validity of two years. The worker can either apply for a visa at the Chilean Consulate while in home country, or in Chile, at the Ministry of Internal Affairs (Extranjería Department).
Visa documents
• Passport valid for more than the visa application period (2 years).
• Photograph 5×5 cms. Passport size, with a white background, whose full face and frontal face are ¾ of the photograph
• Apostilled criminal record, with a maximum of 60 days from the issuance
• Medical certificate of not having infectious diseases
• Apostilled birth certificate
• Professional title, if applicable, apostilled
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