Background Checks

Employers are prohibited from conditioning hiring decisions on economic records (with limited exceptions) and are not permitted to request pregnancy certificates or HIV tests from job applicants.

Verification and New Hiring Reporting

Employers must:

• Register the employee with the Chilean Social Security system (Previsional System) within 30 days of hiring.
• Notify the Labor Directorate (Dirección del Trabajo) of the new employment relationship.
• Ensure the employee is enrolled in a pension fund (AFP) and health insurance provider.

Failure to comply with these steps can result in fines or legal penalties

Onboarding Process & Documentation

Collecting Required Documentation

Upon hiring, employers must collect and retain the following documents:

• Signed employment contract (must comply with Article 10 of the Labor Code)
• National ID (RUT) or valid work visa for foreign nationals
• Proof of education and qualifications (if relevant to the role)
• Bank account details for salary payments
• Health insurance affiliation (FONASA or private ISAPRE)
• Pension fund (AFP) affiliation

Providing Employee Rights and Obligations

Employers are legally required to inform new hires about:

• Working hours and rest periods
• Remuneration and benefits
• Health and safety protocols
• Vacation and leave entitlements
• Termination conditions and severance rights

This information is typically included in the employment contract and reinforced during onboarding.

Healthcare

Chile operates a dual health insurance system consisting of a public fund and private providers. All employees are required to be affiliated with either:

• FONASA (Fondo Nacional de Salud – the public health fund), or
• ISAPREs (Instituciones de Salud Previsional – private health insurance institutions).

Mandatory Contributions

• Employees must contribute 7% of their gross monthly salary to their selected health insurance provider.
• This contribution is automatically deducted from their salary by the employer.

Public Health Insurance: FONASA

• Offers access to a network of public hospitals and clinics.
• Coverage is based on the employee’s income bracket, with lower-income individuals receiving more comprehensive support.
• Pre-existing conditions are fully covered without additional charges.
• Generally considered more accessible and affordable, especially for lower-income groups.

Private Health Insurance: ISAPREs

• Provides access to private clinics, hospitals, and specialists.
• Plans vary widely in terms of coverage, provider networks, and cost.
• The mandatory 7% contribution is applied toward the selected plan. If the plan exceeds this amount, the employee pays the difference (“cotización adicional”).
• ISAPREs may impose restrictions or surcharges for pre-existing conditions, although recent regulations aim to limit such practices.

Employer Responsibilities

• Employers are responsible for withholding and remitting the 7% health contribution to the employee’s chosen provider.
• They often assist employees in selecting an ISAPRE or provide information about FONASA.
• Many employers offer supplemental health insurance as an additional benefit, which can be a key factor in attracting and retaining talent.

Retirement

Chile operates a defined contribution pension system managed by private entities known as Administradoras de Fondos de Pensiones (AFPs). This system is the primary mechanism for mandatory retirement savings.Common employer-sponsored retirement plans include:

• Employee Contributions: Workers must contribute approximately 10% of their gross monthly salary to their individual pension account. Additional percentages cover disability and survivor insurance and AFP administrative fees.
• Individual Accounts: Each employee has a personal retirement account where contributions and investment returns accumulate over time.
• Employer Role: Employers are not required to contribute directly to the pension account. Their only mandatory retirement-related contribution is to unemployment insurance. However, they must deduct and remit pension contributions to the employee’s selected AFP. Ensure timely compliance, as delays or non-payment can result in penalties and interest.
• Retirement Age: The standard retirement age is 65 for men and 60 for women. Early retirement is allowed if the individual has sufficient funds to meet the minimum pension threshold.
• Payout Options: Upon retirement, individuals can purchase an annuity from an insurance company, or opt for scheduled withdrawals managed by the AFP.

Social Security

To learn about the Social Security specifics, please visit the agency’s website.

Employment Contract Details

Chilean labor law recognizes three main types of employment contracts: individual, collective, and special contracts, each with distinct legal requirements and applications.

Individual Employment Contracts

These are written agreements between an employer and an employee, where the employee agrees to perform services under the employer’s direction and the employer agrees to pay compensation.

Mandatory elements (as per Article 10 of the Labor Code):

• Date and place of the contract
• Names and roles of both parties
• Job description and location
• Salary and payment terms (at least monthly)
• Work hours and duration
• Benefits (cash or in-kind)

Collective Labor Agreements

These are contracts negotiated between employers and employee unions to set shared employment conditions, such as:

• Wages
• Benefits
• Work conditions

Key points:

• Must be in writing and registered with the Labor Department within 5 days.
• Valid for 2 to 3 years.
• Can be negotiated freely without court involvement.

Special Labor Contracts

These apply to specific roles or industries, each with unique rules:

• Apprenticeships (for those under 21)
• Agricultural workers
• Maritime and dock workers
• Domestic workers

Contract Types by Duration

• Indefinite Contracts: No end date; most common.
• Fixed-Term Contracts: Limited to 1 year, or 2 years for professionals and managers. If the employee continues working after expiration, the contract becomes indefinite.
• Project-Based Contracts: Valid only for the duration of a specific task and cannot be split into multiple contracts to avoid indefinite status.

Note: Workers under project-based contracts are entitled to vacation and severance under certain conditions.

Probation Period

Probation period is not allowed by law in Chile.

Visas

Tourist Visa: For short visits; extendable once.

Temporary Resident Visa: For business, study, or family; valid for 1 year.

Work Visa: Requires a Chilean job offer; valid up to 2 years.

Permanent Residency: After 2 years on a temporary visa.

Application Process:

• Choose visa type.
• Prepare documents (passport, photos, proof of funds, etc.).
• Apply online or at a consulate.
• Pay fees and attend interview (if needed).
• Await processing.

Independent Contractors

Independent contractors are legally distinct from employees and must meet specific criteria, such as autonomy in work execution and financial independence.

• Contractors are responsible for their own tax filings and social security contributions, unlike employees who receive employer-covered benefits.
• Clear contracts outlining scope, payment terms, and obligations are essential to prevent misclassification disputes.
• While independent contractors do not receive standard labor protections like minimum wage or severance pay, they are still covered by general commercial and civil law provisions.

Paid Time Off

Employees receive 15 working days of paid vacation after 1 year of employment. After 10 years, they earn an additional day for every 3 years of service.

Public Holidays

• New Year’s Day
• Holy Friday
• Holy Saturday
• Labor Day
• Glorias Navales Day
• Indigenous People’s Day
• Saint Peter & Pablo
• Carmen Virgin’s Day
• Mary’s Assumption
• Independence Day
• Army Day
• National Holiday Additional
• Race’s Day
• Church’s Day
• All Saints Day
• Immaculate Conception
• Christmas

Bereavement

Employees are granted 3 days of paid leave following the death of an immediate family member.

Maternity Leave

Women are entitled to 18 weeks of paid maternity leave (6 weeks prenatal, 12 weeks postnatal).

• An optional 12 additional weeks can be requested after postnatal leave.
• Employers must reassign pregnant workers to safer roles if needed, without reducing pay.
• Job protection applies during pregnancy and for 18 months after childbirth, requiring labor court approval for termination.
• Paid by the government or health insurance provider.

Paternity Leave

Fathers receive 5 days of paid leave. After 7 weeks, the mother can transfer some or all of her maternity leave to the father.

Parental Leave

Female employees can take 10 days of paid parental leave for a child under 18. The time taken off must be made up later.

Sick Leave

• Employees must provide a medical certificate within 2 days of starting sick leave.
• Employers have 3 days to submit the certificate to health insurance.
• No pay for the first 3 days of sick leave; sick pay starts from the 4th day, though it may be capped.
• Employees cannot be dismissed while on sick leave unless for reasons unrelated to their health status, such as company restructuring (with court approval)

Termination Requirements

Valid Reasons for Termination:

• Mutual agreement, resignation, or contract expiration
• Breach of contract (must be proven by the employer)
• Company needs or reorganization (most common reason)

Notice Period

Employers must provide a period of 1 month or pay in lieu of notice when terminating an employee.

Severance Pay

Employees who have worked at least one year are entitled to severance pay.

• For each year of service (up to 11 years), employees receive one month’s salary as severance.
• After one year, employees earn an extra month of severance if they have worked at least half of the following year.

Unemployment Insurance

In Chile, unemployment compensation is primarily managed through the mandatory unemployment insurance system, which provides financial support to workers who lose their jobs.

Unemployment Insurance Contributions:

• Employees contribute 0.6% of their taxable income to the unemployment insurance fund.
• Employers contribute 2.4% of the employee’s taxable income.
• Contributions are capped at 90 UF (Unidad de Fomento, an inflation-adjusted currency unit).

Eligibility for Benefits:

• Workers must have contributed to the unemployment insurance fund for a minimum period.
• Benefits are available to employees who are terminated or resign voluntarily under certain conditions.

Benefit Structure:

• Payments are calculated based on the worker’s previous salary and decrease over time.
• The duration and amount of benefits depend on the worker’s contribution history and employment status.

Anti-Discrimination Practices

Chilean labor law strictly prohibits discrimination in employment based on a wide range of personal characteristics. Employers may not make distinctions, exclusions, or preferences that impair equal opportunity or treatment based on:

• Race or ethnicity
• Nationality
• Socioeconomic status
• Language
• Political ideology or opinion
• Religion or beliefs
• Union membership or activity
• Sexual orientation or gender identity
• Marital status
• Age
• Physical appearance
• Illness or disability

Exceptions are allowed only when distinctions are based on job-related qualifications. Additional protection includes:

• Pregnancy: Article 194 of the Labor Code prohibits discrimination based on pregnancy.
• HIV/AIDS: Specific laws protect individuals from discrimination due to HIV status.
• Breastfeeding and Maternity: Law No. 21.155 extends protections to include breastfeeding and lactation-related needs.

Workplace Safety Standards

In Chile, employers are legally required to provide a safe and healthy work environment for all employees. This obligation includes proactive risk management and strict adherence to occupational health and safety regulations. Employers must:

• Identify and assess workplace hazards to determine potential risks.
• Implement control measures to prevent accidents and occupational diseases.
• Provide appropriate personal protective equipment (PPE) to all employees.
• Train staff on safety protocols, proper equipment use, and emergency procedures.
• Maintain a hazard-free environment, addressing any recognized dangers promptly.
• Investigate workplace incidents and take corrective actions to prevent recurrence.
• Register with a mutual safety association or the National Health Service to ensure coverage for occupational accidents and illnesses.

Different industries are subject to specific safety standards. Oversight is primarily conducted by the Labor Directorate and the Ministry of Health, which monitor compliance through inspections and audits. Employers are also required to:

• Keep detailed records of safety training, inspections, and incident reports.
• Ensure ongoing compliance with evolving safety regulations and industry-specific guidelines.

Workers’ Compensation

Chile has a mandatory workers’ compensation system designed to protect employees in the event of work-related accidents or occupational illnesses.

All employers must enroll their employees in occupational accident and disease insurance, typically through Mutual de Seguridad, ACHS, or ISL (public insurer).

Coverage includes:

• Medical care
• Rehabilitation
• Temporary or permanent disability benefits
• Survivor benefits in case of fatal accidents

Employer Responsibilities

• Maintain a safe and healthy work environment
• Inform employees of potential workplace risks
• Report accidents and occupational diseases to the insurer and the Labor Directorate
• Implement preventive measures and comply with safety regulations

Employee Rights

• Receive full medical treatment at no cost for work-related injuries or illnesses
• Be compensated for lost wages during recovery
• Access rehabilitation and reintegration programs
• File complaints with the Labor Inspectorate if safety standards are not met

Compensation for Disability

• Temporary disability: Paid leave during recovery, typically at 100% of salary
• Permanent disability: Lump-sum or pension based on the degree of impairment
• Death benefits: Compensation to dependents and coverage of funeral expenses.

Labor Law Sanctions

Labor Code (Código del Trabajo): This is the primary legislation governing labor relations in Chile. It includes provisions on working hours, wages, occupational safety, and health. Violations can result in fines and other penalties.

Subcontracting and Temporary Services: This law regulates subcontracting and temporary employment. It includes sanctions for companies that fail to comply with regulations regarding the treatment and rights of subcontracted workers.

Workplace Accidents and Occupational Diseases: This law mandates employers to take preventive measures to protect workers from accidents and occupational diseases. Non-compliance can lead to fines and other sanctions.

Labor Reform: This law introduced significant changes to collective bargaining and union rights. It includes penalties for employers who engage in unfair labor practices or violate workers’ rights to organize and bargain collectively