Employment Laws and Policies in Chile

Employment in Chile is governed primarily by the Chilean Labor Code (Código del Trabajo), ensuring employee rights, fair pay, and social protection.

Employment Contracts

• Written contracts are mandatory and must be provided within 15 days of the employee’s start date.
• Contracts must include job title, salary, working hours, location, and notice period.
• Both indefinite and fixed-term contracts are permitted.
• Probation Period: Not explicitly defined by law, but fixed-term contracts (up to 1 year) can serve as probationary arrangements.
• Employment contracts must be in Spanish and governed by Chilean law.

Working Hours

• Standard Workweek: 45 hours, typically spread over 5 or 6 days.
• Daily Maximum: 10 hours (including overtime).
• Overtime Pay: 150% of regular pay (limited to 2 hours per day).
• Rest Periods: At least 11 consecutive hours between workdays.

Leave Entitlements

• Annual Leave: Minimum 15 working days of paid vacation after 1 year of service.
• Sick Leave: Fully paid upon submission of a medical certificate; reimbursement comes from social security.
• Maternity Leave: 18 weeks (6 before and 12 after childbirth), paid at full salary through social security.
• Paternity Leave: 5 days paid leave (taken consecutively or within a month of birth).
• Parental Leave: Mothers can extend leave for up to 12 additional weeks (at partial pay).
• Public Holidays: 15+ per year (paid).

Payroll, Tax & Contributions

• Income Tax: Progressive, up to 40%.
• Employer Contributions:
  • Pension (AFP): 10% (employee-paid)
  • Health Insurance (Fonasa/Isapre): 7% (employee-paid)
  • Work Accident Insurance: 0.93–3.4% (employer-paid)
  • Unemployment Insurance: 2.4% (employer) + 0.6% (employee)
• Payroll Frequency: Monthly, in Chilean Peso (CLP).
• Employers must register with Dirección del Trabajo and remit contributions to social security and tax authorities on time.

Health & Safety

• Employers are responsible for providing a safe and healthy workplace under the Law on Occupational Safety and Health (Law 16.744).
• Employers must provide risk prevention training, protective equipment, and medical exams for specific industries.
• Workplace accidents must be reported and compensated through Mutual de Seguridad (insurance mutuals).

Termination & Severance

• Notice Period:
  • 30 days for indefinite-term employees.
• Severance Pay:
  • One month’s salary per year of service (up to 11 months) for dismissals without cause.
  • Not applicable in cases of serious misconduct.
• Termination must be formally communicated in writing and reported to the Labor Directorate.

Non-Discrimination & Equality

• The Labor Code prohibits discrimination based on gender, race, religion, political opinion, age, or disability.
• Equal pay for equal work is mandatory.
• Sexual harassment is a punishable offense under Chilean law.
• Companies with more than 100 employees must hire at least 1% of workers with disabilities or contribute to an inclusion fund.