Our Employer of Record (EoR) / International PEO solutions enable staffing organisations and foreign businesses to expand into Chile and hire employees without the need to establish a new corporate entity.
We take care of the entire employment relationship including managing all social security costs, social benefits and statutory rights afforded to the employee. The best part is that our EoR solutions are completely managed by the Capital GES team, allowing you to concentrate on international expansion.
Interested in doing business in Chile? Here are the top five things you need to know:
1. Social security
Employer contributions vary considerably depending on a number of factors including contract type, length of service and accident risk. The normal range is between 6-10% of the gross salary. Employee contributions have to be deducted from the employee’s gross salary at between 18-21% of the gross salary. Both employer and employee contributions are subject to caps which are updated every month.
The employer must also withhold the employee’s income tax at source, when applicable.
2. Fixed-term contract extensions
A fixed-term contract must not exceed 12 months and may be renewed only once; the total term must not exceed 2 years. After 2 years or a second renewal, whichever comes first, or if the employment is renewed twice for a total duration of 12 months in any 15-month period, the employment relationship is deemed indefinite.
Fixed-term contracts may be terminated earlier than the agreed expiry date but the employer still has the obligation to pay salary to the worker until the end date stipulated by contract.
3. Notice periods and termination rules
There are no notice periods during probation.
Notice for ending an employment agreement is 30 days for both parties. A written copy of the notification should be forwarded to the Labour inspectorate.
Payment in lieu of notice is permitted.
Termination is not generally permitted during periods of sick leave, maternity or military service.
For the accrued 13th salary and vacations as well as any part of the notice period not worked.
4. Maximum working hours and overtime
Regular working hours vary but must be between 7am and 10pm (with a minimum half hour break)
Monday to Saturday and must not exceed 10 hours per day with a limit of 45 regular hours per week spread over a minimum of five days. Work on Sundays and on public holidays is generally forbidden.
5. Statutory paid holiday
Holiday entitlement is 15 working days after one year of employment, and does not include public holidays. Additional days are due after 10 years of employment history in Chile.
If you are looking to expand your workforce in Chile (or any other of the 30 countries we operate in) without the burden of registering an entity and incurring significant expense and administration then please get in touch with Nick Broughton at Capital GES on +44 7539 337 563 or email Nick.Broughton@Capital-GES.com.
Capital GES provides market-leading employment services to staffing companies, corporate clients and independent contractors in all sectors across Europe, Latin America and southern Africa. With headquarters in Switzerland and offices in USA, Brazil and UK, Capital GES provides services including Employer of Record, Contractor Payroll, Invoice & Pay and IC Compliance Checking.
For more detailed information on employment matters in Chile, including statutory benefits, employment regulations and contract requirements, download our free guide today or contact our team for a free consultation.