Employer of Record in Chile

General Information

• Currency: Chilean Peso (CLP)
• Employer Taxes: Unknown
• Payroll Frequency: Monthly
• Employee Costs: 19.99%
• Capital: Santiago
• Fiscal Year: 1 January – 31 December

Main Aspects of the Labour Code

Minimum Wage

General: The monthly minimum wage in Chile is $500,000 CLP.

Payroll

Payroll Cycle: Monthly

13th Salary

There are no provisions in the law regarding 13th salaries.

Working Hours

General: In Chile, a full workweek consists of 44 hours spread over 5 or 6 days. Employers are allowed to extend the workday by up to 2 hours per day or 10 hours per week. The Chilean labor code encourages daily rest breaks, a midday meal break (lasting at least half an hour), a weekly rest day on Sundays, and observance of national holidays.

Employees who provide technical support, work in public shops, or the entertainment industry, and are required to work on Sundays or national holidays, are given rest days on alternative days.

In 2023, Chile passed a law establishing a 40-hour workweek, aimed at improving the quality of life for workers covered by the labor code.

The implementation of this law will occur in stages:

• One year after enactment, the workweek will decrease from 45 to 44 hours.
• Three years after enactment, the workweek will be reduced to 42 hours.
• Five years after enactment (by 2028), the workweek will be reduced to 40 hours.

Even though the law is being phased in, many companies have already adopted the 40-hour workweek.

Overtime: Overtime is paid at a rate of 150% of the regular pay.

Leave

Annual Leave (Vacation):

Employees who have been with the company for at least one year are entitled to 15 working days of paid leave. After 10 years of service, an additional day is granted for every three years of employment.

Public Holidays

In Chile, the 17 public holidays are classified as either “Mandatory” or “Non-Mandatory.” On “Mandatory” holidays, employees must be given the day off, while on “Non-Mandatory” holidays, employers can request that employees work. In such cases, workers are entitled to an additional 50% of their salary for working that day (calculated as Monthly salary * 0.00875 = amount paid per hour).

If a public holiday falls on a weekend, it is typically not compensated with an additional day off.

Sick Days

Employees are entitled to sick leave if they submit a medical certificate within 2 days of starting their leave. The employer must then forward the certificate to the health insurance provider within 3 days.

The first 3 days of sick leave are unpaid. Starting from the 4th day, sick leave is covered by the Social Healthcare system (FONASA/ISAPRE), with payment subject to certain limits.

Maternity Leave

Maternity leave in Chile is divided into 6 weeks of leave before the birth (prenatal) and 12 weeks after the birth (postnatal). After this period, an additional 12 weeks of leave can be requested, which may be extended to 18 weeks if the mother returns to work on a half-time basis.

Maternity leave is paid by the Social Healthcare system (FONASA/ISAPRE). However, if the mother returns to work part-time during the extended leave, the employer is responsible for paying half of her salary for the time worked. During maternity leave, employees must provide a “licencia médica” (medical absence certificate) to HR.

During pregnancy, a woman is not required to engage in activities that could endanger her health (e.g., heavy lifting). If her job involves such tasks, the employer must reassign her to a different role without reducing her pay. Additionally, throughout pregnancy and up to 18 months after childbirth, the employer can only terminate her contract with the authorization of a labor court.

Paternity Leave

Fathers are entitled to 5 days of paternity leave, which is paid by the Social Healthcare system (FONASA/ISAPRE).

Starting from the 7th week after childbirth, the mother has the option to transfer some or all of her maternity leave to the father.

Parental Leave

Female employees are entitled to 10 days of parental leave for a child under 18. Although this leave is paid, the employee is required to make up the time taken off at a later date.

Other Leave

Marriage Leave – Employees are entitled to 5 business days of leave with full pay, which must be taken consecutively. These days can be taken either before or after the wedding, within 3 days of the wedding date.

Bereavement Leave – In the event of the death of an immediate family member (father, mother, or sibling), employees are entitled to 4 business days of paid leave. For the death of a spouse, employees receive 7 calendar days of paid leave. In the case of the loss of an unborn child, 7 business days of paid leave are provided. For the death of a child, employees are entitled to 10 calendar days of paid leave.

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