Chile is host to many multinational businesses, and has one of the highest rates of working hours in the world. Therefore, what are the legal obligations for global employers in Chile?
Also available: Employment law in Chile (US version)
Chile’s economy is dominated by foreign trade, including global financial and technology companies. Household names such as IBM, Yahoo! and Microsoft all have major operations there.
By law, employees must put in a 45-hour working week, so the working day in Chile is typically long. However, on the whole, workers are not expected to work on Sundays.
Chilean employers are also obliged to share profits with their employees, either paying workers 25% of their annual remuneration or 30% of annual net profits.
More information can be found in XpertHR’s new guide to employment law in Chile, which also includes the following seven interesting facts.
1. Employment contracts
Under Chilean employment law, employers must ensure that a written contract is in place within 15 days of the employee starting work (five days if the contract is for less than 30 days), or face a fine. If an employee refuses to sign a contract, the employer is obliged to refer the matter to the Labour Inspectorate.
2. Compulsory profit-sharing
Profit-making employers are obliged to distribute a share of their profits to their employees. Employers have the choice of two statutory methods or can agree another scheme with their staff. If employers choose to agree a scheme, the payments received by employees must be at least equal to the amount that would have been payable under the statutory scheme.
3. Dismissal “at will”
Employment legislation in Chile allows certain key employees – such as managers, assistant managers and those employees in positions of “exclusive confidence” – to be dismissed “at will”. An at will dismissal allows an employer to dismiss an employee without providing any facts to justify the dismissal. However, for those employees with at least one year’s service, the employer will be liable to make a compensatory payment.
Following one year’s service with their employer, employees are entitled to 15 working days of paid annual leave, with an additional entitlement after 10 years’ employment. Employees are entitled to receive their full normal remuneration during annual leave.
5. Foreign nationals
Foreign nationals working in Chile will require a visa or permit. Any employer with more than 25 employees will need to ensure that at least 85% of their employees – excluding expert technical staff – are Chilean nationals.
6. No obligation to inform or consult
There is no statutory obligation on employers to inform and/or consult employees directly, or through trade unions or other representatives, about planned redundancies or business transfers.
7. Sunday work
Employees must not work on Sundays in Chile, except in roles where Sunday working is specifically authorised by law. Unless the worker falls within such an exception, employees are entitled to a rest period starting at the latest at 9pm on Saturday and ending at the earliest at 6am on Monday.