Businesses from all corners of the world have hired professionals from the Chilean workforce with great success. Why? Because hiring Chilean talent is affordable for most companies, and these workers are highly skilled, educated, and knowledgeable in industries like finance, tourism, and service. 

If you’re seeking out Chilean workers, it’s important to recognize how important labor laws and social protection are to the Chilean government. Through the Chile labor laws, employers are instructed and required to provide various non-negotiable benefits to workers. Plus, workers in the country will expect to receive all the benefits granted to them by the government. 

So, employers looking to expand into the country should learn about employee benefits in Chile. And we’ll help with that. We’ll walk you through non-negotiable provisions and supplemental benefits to make your Chile worker benefits package more rewarding for successful candidates.  

Where to Find Chile Labor Laws About Employee Benefits in Chile

Employers should comb through the labor laws in Chile long before assembling a benefits package. It’s this knowledge that will inform the rest of the benefit-creation process. First, get familiar with the Labor Code of Chile (the “Codigo de Trabajo” in Spanish). It outlines the ins and outs of the employer/employee relationship, including employee benefits and general rights as a worker. 

You can find the Labor Code of Chile in PDF form on the Dirreccion Del Trabajo website run by the Chilean government. But it is in Spanish. If you don’t read Spanish or would rather see the law in English, you have a few options: 

  1. Download and translate the PDF using a PDF translator tool.
  2. Look into international law firm guides on the labor law in Chile. 

For the purposes of this guide, we’ll reference both the official Chilean labor law and scholarly law firm resources. 

Mandatory Employee Benefits in Chile 

Chile has quite a few employee benefit laws that apply to foreign businesses and their Chilean employees. As you build your benefit plan, be sure to include the non-negotiable benefits below: 

Health Insurance (FONASA or ISAPRE)

Chile administers compulsory health insurance through the FONASA, the national health insurance service. Though employers don’t have to pay for their employee’s national health insurance, they do have to set up the account and withhold 7% of the employee’s salary to fund the plan. Employees can also go for private insurance through ISAPRE (a private health insurance provider). 

Pension Fund Contributions (AFP)

When an employee reaches retirement age (65 for men and 60 for women) and is found to be eligible, they are entitled to funds from their pension. To fund this pension fund, the employer and employee must make regular payments to Chile’s pension system. The employer doesn’t have to contribute to the pension fund in most cases, but they do have to set up the account for the employee and manage employee contributions. 

The employer will have to contribute to the pension plan if the job is hazardous.

Unemployment Insurance

Unemployment insurance is a mandatory benefit that the government, employer, and employee must contribute to. The employer must contribute 2.4% of the employee’s salary and the employee must contribute 0.6% of their salary. 

Vacation Leave

In Chile, workers who have at least one year of seniority at their job get 15 days of vacation. After 10 years of work experience, the employee gets an extra vacation day for every three years of service for their present boss. Vacation leave may vary a bit based on the Chilean region. 

Public Holidays

The Chilean government recognizes 16 different public holidays, and employees don’t have to work on these days: 

  • January 1 – New Year’s Day
  • April 3 (Date varies) – Good Friday
  • April 4 (Date varies) – Holy Saturday
  • May 1 – Labor Day 
  • May 21 – Navy Day
  • June 21 (Date varies) – National Day of Indigenous Peoples
  • June 29 – St. Peter and Paul
  • July 16 – Our Lady of Mount Carmel
  • August 15 – Assumption Day 
  • September 18 – Independence Day
  • September 19 – Army Day
  • October 12 – Day of Discovery of Two Worlds
  • October 31 – Reformation Day (Día de las Iglesias Evangélicas y Protestantes) 
  • November 1 – All Saints’ Day 
  • December 8 – Immaculate Conception
  • December 25th – Christmas 

NOTE: *Moving holiday

Some of the above public holidays are regional and wouldn’t apply to every employee. To nail down the holidays that would apply to a particular employee, browse the local government website where that employee lives.

Maternity Leave

For maternity leave, you have to allow 6 weeks of leave before the birth of the baby and 12 weeks after the birth. The employee should receive their full salary throughout the leave. There will be some variation in leave duration based on the circumstances surrounding the pregnancy and birth. 

Paternity Leave

Male employees are entitled to 5 days of paid maternity leave. They should receive 100% of their normal salary. This leave shouldn’t start until after the child is born. The Social Security system pays for the employee’s wages throughout the leave.  

Sick Leave

Employees in Chile are entitled to sick leave if they are experiencing an illness or injury and have documentation from a doctor within 2 days of the leave. There’s no pay for the first three days, but days 4 and onward are paid through social security.

Severance Pay

Chile’s severance pay policies are simple; employees who lose their jobs because of a business’s financial insolvency or restructuring plans are entitled to severance pay. Severance pay should be paid by the employer. It should equal one month’s salary for each year the employee has worked for the company (up to 11 years). 

Working Hours, Minimum Wage, and Overtime

Per Chilean law, employees shouldn’t work more than 10 hours per day or 44 hours per week as of 2024. Over the next couple of years, we’ll see the maximum working hour limit decrease. The goal is to reduce it to 40 hours by 2028. 

Date of ChangeWeekly Working Hour Limit
April 26, 202444
April 26, 202642
April 26, 202840

Sundays are considered holidays in Chile. Any time your employee is made to work on a Sunday, they are to receive a paid day off in exchange. If this happens more than once over the course of a week, the employer may pay 150% of the employee’s salary for those days or come up with another agreement with the employee.

Supplementary Employee Benefits in Chile

In addition to the benefits outlined above, consider adding supplementary perks to your benefits package for Chilean employees. Here are some supplementary benefits that Chileans will no doubt appreciate: 

  • Offer more time off (or paid time off) than is afforded by Chilean law.
  • Flex time and alternative work locations to give employees more autonomy.
  • Monetary benefits to ease transportation costs for employees.
  • Meal vouchers and allowances to create more financial wiggle room.
  • Offer additional private insurance plans to fill in any gaps left behind by Chilean public or private insurance plans.
  • Contribute more than required to your employee’s social security plans.
  • Celebrate milestones and performance achievements.

How to Create an Employee Benefits Package That Wins Over Chilean Employees

Creating a benefits package for workers from a foreign country is nothing short of a challenge. And that’s why it’s so important to be intentional at every turn. In addition to noting the information we’ve covered above, read up on the Chilean labor code. Translating it from Spanish to English can be helpful, but if that’s not feasible, you can look into alternative resources created by Chilean or international lawyers. 

Then, choose which supplemental benefits might be appealing to the Chilean workers you’re looking to target. A delivery driver in Chile might find transportation stipends to be much more valuable than an office-based software developer. It also pays to research the Chilean culture to gain additional insight into what Chilean workers are looking for in an employer benefits package. Before deciding on all of the benefits, ensure that they align with your desired work culture and budget. 

With all of this information sorted out, you’re ready to put words to paper. Create a document outlining all of the mandatory and supplementary benefits you’d like to include in your benefit plan. Then, store it securely and make it accessible to candidates and authorized parties as needed. 

Additional Assistance is Available

If, at any point, you find yourself in need of assistance, know that there is help available. Here are a few professionals to look into:

  • Employers of Record (EORs) – These organizations act as the employer for your candidates and handle compliance matters such as benefits administration, payroll, and more. You don’t need a legal entity in Chile to work with an employer of record.
  • Professional Employer Organizations (PEOs) – These firms assist with payroll taxes, workers’ comp, employee benefits, and other HR issues. To use PEO services, you need a legal entity in Chile.

Legal experts, HR professionals, and tax professionals can also be helpful. 

So, there you have it – everything you need to know about employee benefits in Chile. We hope that you found the information you need to find Chilean candidates and propel your business forward.