Chile is a country on the western side of South America, bordered by Peru, Bolivia, and Argentina. It occupies a long narrow strip of land between the Andes mountain range and the Pacific Ocean.

Chile is considered a developing country with a high-income economy, and has the highest degree of economic freedom in South America due to its efficient judicial system and prudent public finance management.

There are 2 different rates for minimum wage in Chile, one for minors and retirees, and one for working adults. The rate is CLP$400,000 per month for working adults and CLP$283,471 for minors and those over 65.

A full workweek in Chile lasts 45 hours.  An employer can extend the day by no more than 2 hours per day, or 10 hours a week. Overtime worked is paid at a rate of 150% of the regular salary.

Parental Leave

Pregnant employees in Chile can take 30 weeks of paid maternity leave, starting 6 weeks before the delivery and then 24 weeks after, this leave is paid by the country’s health insurance agency.

Fathers receive 5 days of paid leave after the birth and can also share some of the mother’s maternity leave (up to 6 weeks), which is paid at 100% of the normal salary. Along with regular paid leave, mothers of children under 18 receive an additional 10 days of leave.

Sick Leave

Employees in Chile receive sick leave benefits if they can provide proof from a medical professional within 2 days of the leave beginning. The first 3 days are unpaid, and day 4 and on are paid by the employer (subject to a cap).

Paid Leave

There are 16 public holidays in Chile, and employees who have worked at least 1 year at their company are entitled to 15 days of paid time off per year. Additionally, employees in Chile can also receive Carer’s Leave and Adoption Leave.

Process

In Chile there is no at-will termination, meaning employers must provide cause for terminations. The cause can be selected as one of these options:

• Mutual agreement, resignation, or expiration of contract
• Dismissal due to breach of contract or other proven serious issue
• Company needs/reorganization
• Force Majeure

It is common for Chileans to litigate terminations, so there needs to be documentation of the situation — employers could become liable for attorneys’ fees and other damages if they are found guilty of wrongful termination.

Notice Period

Employees in Chile are due 1 month of termination notice by law.  Much of the time this month of notice is paid out instead of asking the employee to work for one more month.

Severance Pay

In the event of termination, the employee is due a severance payment of 1 month salary for every year worked (with a max of 11 years).

Employees in Chile are entitled to a government-mandated “legal gratification” bonus that is typically paid monthly, and can be calculated in 2 ways:

1. 30% of the company’s net income is divided amongst all the employees (proportionate to their income level)
2. Pay the employee 25% of their wages earned that year, regardless of the company’s net income. This bonus is capped at 4.75 of the Minimum Monthly Income (IMM) which is currently around CLP$83,125 per month.

While not required, it is also common to pay a 13th month bonus “aguinaldo” on Chile’s Independence Day and around the December holidays.