Employment Law In Chile: A Quick Guide

• Published date: 08 January 2024
• Subject Matter: Employment and HR, Contract of Employment, Retirement, Superannuation & Pensions, Employee Benefits & Compensation
• Law Firm: Biz Latin Hub Group
• Author: Biz Latin Hub Group

If you are interested in entering the Chilean market or are already doing business there, you need to understand and comply with employment law in Chile.

Employment law in Chile, which is overseen by the Ministry of Labor and Social Security, shares many similarities with other countries in the region, but also contains particularities that you will need to navigate when doing business in the market.

If you are planning a short-term or limited-scale operation, hiring staff through an employer of record in Chile could be your best choice ' allowing you to hire staff without going through company formation, and coming with the additional benefit of guaranteed compliance with local employment law.

If, instead, you are set on making a deeper commitment to the Chilean market, you will need to acquire the services of a reliable corporate lawyer in Chile, in order to guarantee the proper implementation of all laws related to your business.

Below, a guide to some of the essentials related to employment law in Chile is offered, including information on standard working hours, the most frequently used types of contracts, details related to vacations and other leave, and information on tax contributions that employers must oversee.

Working hours according to Chilean employment law

Under employment law in Chile, a standard working week is 45 hours long and divided into no less than five and no more than six days. An average working day is nine hours long.

An employee can be exempted from this provision by being designed as "trusted" in their contract. This provision was originally intended to be applied to managers and executives, but over time has been used for a broader range of employees.

Note that in Chile there are generally between nine and 12 national holidays that fall on weekdays per calendar year.

Employment law in Chile: main contract types

There are three main types of employment contract

There are three contract types under employment law in Chile that are most commonly used by foreign investors and corporations.

1. Indefinite-term employment contracts are the most common type of contract used in Chile, and can only be terminated by mutual agreement between the employee and employer or when one of the parties can act unilaterally, such as in the case of the employee resigning.
2. Fixed-term employment contracts can last for days, weeks, or months, but they generally do not exceed more than one year. However, in certain cases they can last for up to two years.
3. Specific task or project contracts ' regarded as an...