Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Spanish and use the Chilean Peso currency (CLP).
Working Hours
A full work week in Chile is 45 hours over 5 or 6 days. The employer has the right to extend the day by no more than 2 hours a day or 10 hours a week. The Chilean labor code recommends daily rest periods, a midday meal (as part of a break for at least half an hour), a weekly rest day on Sundays, and national holidays.
Employees delivering services providing technical support, working in public shops, or in the entertainment industry and therefore required to work on Sundays and national holidays, are provided with rest days on different days.
In 2023, Chile approved a 40-hour workweek law reducing the length of the working day to improve the quality of life of workers who are governed by the labor code.
This law will be implemented gradually as follows:
- One year after implementation: the working week will be reduced from 45 to 44 hours.
- Three years after implementation: the working week will be reduced to 42 hours.
- 5 years (in 2028) after implementation: the working week will be reduced to 40 hours.
5 years (in 2028) after implementation: the working week will be reduced to 40 hours.
Although this law is set to be implemented gradually, many companies have already put a 40-hour work week into effect.
Overtime
Overtime is paid at a rate of 150% of the regular pay.
Public Holidays
Public holidays that fall on the weekend are usually lost.
For the year 2024:
- Jan 1: New Year’s Day
- Mar 29: Holy Friday
- Mar 30: Holy Saturday
- May 1: Labor Day
- May 21: Glorias Navales Day
- Jun 20: Indigenous People’s Day
- Jun 29: Saint Peter & Pablo
- Jul 16: Carmen Virgin’s Day
- Aug 15: Mary’s Assumption
- Sep 18: Independence Day
- Sep 19: Army Day
- Sep 20: National Holiday Additional
- Oct 12: Race’s Day
- Oct 31: Church’s Day
- Nov 1: All Saints Day
- Nov 8: Immaculate Conception
- Dec 25: Christmas
Annual Leave (vacation)
Employees who have been employed for at least 1 year are entitled to 15 working days of paid leave. After working for 10 years, an extra day is added for every 3 years of service.
Sick Leave
In Chile, employees are entitled to sick leave if they can provide a medical certificate within 2 days from the beginning of the leave. The employer must then forward the certificate to the health insurance within 3 days.
- For the first 3 days of sick leave, the employee is not entitled to pay
- From the 4th day on, employees are entitled to sick pay, however, it may be subject to a cap.
Maternity and Paternity
Maternity Leave
In Chile, the woman is entitled to 18 weeks of maternity leave – split between six weeks paid prenatal leave and twelve weeks paid postnatal leave. Following completion of the twelve-week postnatal leave, new mothers have the right to request a further twelve weeks’ leave.
During the pregnancy, the woman is not required to participate in activities that would endanger her health (i.e. heavy lifting). If this is a requirement of the job, the employer must reassign her to a different position during her pregnancy without pay reduction. Also during the entire pregnancy and up to eighteen months after the birth, the company may only terminate the employment contract of the mother with authorization of a labor court.
Maternity and paternity leave are paid for by the government or the company health insurance provider.
Paternity Leave
Fathers are entitled to 5 days of paid paternity leave.
After the 7th week of birth, the mother can opt to transfer some, or all of her maternity leave to the father.
Paternal Leave
Female employees are entitled to 10 days of parental leave for a child under the age of 18. While the employee is entitled to be paid, they must make up the time taken off at a later date.
Other Leave
Bereavement Leave
If a member of the employee’s immediate family passes away, the employee is entitled to 3 days of paid leave.
Employee Severance and Terminations
Termination Process
In order to terminate an employee, the cause must first be decided. By law, the following reasons are valid reasons for termination:
- Mutual agreement, resignation, or expiration of a contract
- Breach of contract (employer must be able to provide proof)
- Company needs or reorganization (the most common reason for the dismissal of an employee)
The employer must prepare a letter for the employee stating the cause for termination as well as the effective date and it must be signed in person by the employee or sent by certified mail to their home address. In addition, the same letter must be filed with the Chilean Labor Ministry. It is common that the employee is notified on the last day or work.
After the termination letter is given, the employer must prepare a severance agreement which must include the cause for termination as well as the amount that will be paid out to the employee. The severance agreement must be signed within 10 days of the termination.
In the case of a mutual agreement, both parties must sign a document acknowledging that both parties have agreed that the employment contract is terminated. A severance agreement must also be signed within the first 1-2 weeks following the termination date.
Notice Period
The notice period is 1 month by law. It is common that the notice period is waived and payment is made in lieu.
Severance Pay
If the employee has completed at least 1 year of employment, they are entitled to severance pay. For every year of service up to 11 years, the employee is entitled to 1 month’s salary. In addition, after one year of employment, the employee accumulates an additional month of severance pay if they have worked for at least half of the following year.
Probation Period
Probation period is not allowed by law in Chile.
Payroll Cycle
Payroll in Chile is monthly.
The monthly minimum wage in Chile is 460,000 CLP. The next minimum wage increase is expected in July 2024 to $500,000 CLP.
13th Salary
There are no provisions in the law regarding 13th salaries.
Contributions
Employer Payroll Contributions
VISA
Anyone who comes to Chile with the intention to work, even if they don’t require a visa to enter, must receive a work visa.
There are two kinds of work visas available to foreigners:
Visa Subject to a Contract – for candidates who have secured an employment contract prior to arriving in Chile. It is valid for 2 years and can be renewed for an additional 2 years. After that, a candidate needs to a apply for permanent resident status, which would allow the candidate to continue to work in Chile.
The process requires about 20-30 days to complete. The application should be filed 30-60 days before the expected arrival.
To get the permit, the hiring company must be incorporated in Chile, demonstrate that the hiring will help Chile, and have their VAT and employee insurance paid for the past 3 months.
Working Holiday Visa – People from Colombia, Mexico, Peru, Germany, Canada, Australia, Czech Republic, and New Zealand who are between the ages of 18 and 35 can apply for a 1-year visa that allows them to work in Chile. The visa cannot be renewed.
VAT
The standard rate of VAT in Chile is 19%.