September 5, 2023
Chile stands as a beacon of economic progress in South America, holding the impressive 2nd position among the 32 countries in the region. Its market-oriented economy and thriving foreign trade activities have earned it the distinction of being the 20th freest economy in the 2022 index. Moreover, Chile's significance as a top producer of copper, lithium, nitrates, and other minerals further cements its prominent position on the global stage.
Chile boasts a dynamic free market economy that nurtures well-rounded and highly skilled workers, making them an ideal fit for your business. However, employers must remain informed about the rules and regulations when considering onboarding employees from the country. The upcoming sections shed light on some of Chile's essential labor laws.
In Chile, official employment contracts are required to be in Spanish. If both parties prefer, an English translation may be included, but it must always be accompanied by a Spanish version.
Chilean employees typically undergo a probation period lasting from 1 to 3 months.
Annual Leave 15 days
Sick Leave 2 days
Maternity Leave 30 weeks
Chile releases payroll every month.
Minimum wage in Chile is determined based on an employee's age. For those aged 18 to 65 years old, the minimum wage stands at CLP 400,000 per month, while for employees under 18 years old and over 65 years old, it is CLP 298,391 per month.
In Chile, the regular working hours constitute 45 hours per week. Overtime hours performed during a typical working day entitle employees to receive 150% of their hourly rate. On rest days, employees are compensated at 130% of their regular rate for their work.
Chilean employees typically receive 13th-month pay as a customary practice.
Chile's standard Value Added Tax (VAT) rate is 19%.
In Chile, employment contracts are not generally terminated at-will. The termination decision must be based on valid reasons, and either party is required to provide a written notice regarding the contract termination.
During the probation period, Chilean employees are required to adhere to a notice period of up to 7 days. Once outside the probation period, the notice period extends to up to 30 days.
Employees in Chile who are terminated without just cause, due to redundancy, or as part of a collective dismissal are entitled to receive severance pay equivalent to 30 days of remuneration for each year of service.
Foreign nationals planning to work in Chile must obtain a work visa to ensure legal employment in the country. The Chilean work visa is valid for one year and can be extended upon renewal.
Alternatively, a Holiday working visa may be granted to foreign workers intending to work in Chile for a year. However, unlike the standard work visa, the holiday working visa is a one-time grant and cannot be renewed.
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