Chile

Labor Compliance Guide

Labor Requirements

The Labor Law in Chile is governed by the Labour Code(last amended 2021) The other regulations which govern the labor relationships are Law No. 16,744 regarding labor accidents and professional illnesses, Decree-Law (DL) No. 3,500, and its modifications, which regulate the private pension system. 

Hours & Pay Regulations

Normal Working Hours

The duration of the ordinary week of work shall not exceed 45 hours. The daily ordinary hours may not exceed 10 hours excluding overtime. A week is defined as not more than 6 working days and not less than 5 working days. 

 

The ordinary working day may be exceeded, in cases where it is necessary to avoid damages in the normal operation of the establishment or task, when force majeure occurs, or when accidents must be prevented. Hours worked in excess will be paid as overtime.

 

Managers, employees with powers to manage, as well as those who work without direct supervision, at home or in another location than the workplace, are excluded from the application of working hours limits. Labour Code, art 22 (last amended 2021).

 

Part-Time Work Week

The “part-time” week duration cannot exceed 30 hours per week. In part-time work, overtime is allowed only by an agreement. The calculation basis for the payment of said overtime hours may not be less than the monthly minimum income determined by law, calculated in proportion to the number of hours agreed as an ordinary day. Labour Code, art 40 bis – 40 bis B (last amended 2021).

 

Recording Requirement

The employer shall keep a register consisting of a staff assistance book or on a watch with registration cards to control attendance and determine working hours, be it ordinary or overtime work. Labour Code, art 33(last amended 2021).

Overtime

Any work performed in excess of 10 hours per day and 45 hours per week shall be considered as overtime. The maximum “ordinary” hours shall be 10 hours a day, and the employee’s additional working hours a day cannot exceed 2 hours within the same day, bringing the total for each day to a maximum of 12 working hours.  No employee can work more than 12 hours a day. In addition, overtime work can only be agreed on a temporary basis and such overtime work cannot exceed a total of 3 continuous months on the basis of an agreement between the employer and employee.

 

Pay -The Overtime pay rate is 50 percent of the normal hourly wage.

Night Work

Night work is work performed between 10:00 p.m. and 07:00 a.m. the next day. Labour Code, art 18 (last amended 2021).

Breaks

The working day shall be divided into 2 parts, leaving between such parts at least the time equal to half an hour for break. This period will not be considered working for the purpose of calculating the duration of the daily work. Labour Code, art 34 (last amended 2021).

 

For part-time employees, the daily workday for employees shall be interrupted for a period of no less than 30 minutes or more than 1 hour for an unpaid break period. Labour Code, art 40 bis B (last amended 2021).

 

Weekly Rest/Sunday 

Sundays will be a holiday. Rest days will begin at the latest at 9:00 p.m. on the day before Sunday or a holiday and will end at 6:00 a.m. the day after, except for time changes that occur due to the rotation of work shifts. At least 2 days of rest per month must be enjoyed on Sundays.

Work On Rest Days

Employers must grant 1 day of rest per week in compensation for the work carried out on Sunday or rest day within the following week.

 

In case when remote work needs to be carried out from urban centers, the parties may agree to uninterrupted ordinary working hours of up to 2 weeks, at the end of which the compensatory rest days (Sundays or holidays) that have taken place in the said biweekly period, shall be increased by 1 day.

 

For commercial and service establishments which directly serve the public, the ordinary hours worked on Sunday or rest day must be remunerated with a surcharge of at least 30% on the regular rate of pay.

 

The establishments exempted from providing Sunday as rest days are allowed to distribute their normal working day in a manner that can include Sundays and holidays as working days. 

 

Overtime on Rest Day or Sunday

Any overtime work performed on rest days shall be paid at an overtime rate whenever they exceed the normal weekly working hours. Overtime will be paid with a 50 % percent surcharge on the agreed salary for the ordinary day and must be settled and paid together with the ordinary remuneration of the respective period. 

 

The employee and employer may agree to enter into an agreement in which the working day corresponding to a business day between two holidays or between a holiday and Saturday or Sunday be taken as a day of rest with remuneration. The agreement shall specify the days on which the services will be carried out to compensate for the hours not worked in the business day granted as a rest day and such hours would not be considered as overtime hours.

 

Establishments that are not exempted from Sunday rest provisions, shall not enter into an agreement with employees for compensatory work to be performed on Sundays.

 

Exceptions 

In commercial and service establishments which directly serve the public, the ordinary hours worked on Sunday must be remunerated with a surcharge of at least 30%, calculated on the agreed salary for the ordinary working day. The value of the ordinary hour and the indicated surcharge will be the basis of calculation for the purposes of determining, where appropriate, the value of the overtime worked on said Sundays. 

 

Establishments not exempted from Sunday rest are not allowed to distribute ordinary working hours over a Sunday or a Public holiday, except in unforeseen circumstances.

 

Employers in establishments where Sunday rest exemption has been provided must grant one day of rest per week in compensation for the activities carried out on Sunday, and another for each holiday in which the employees had to provide services.

 

Establishments that perform work of continuous nature or service companies directly catering to the public shall grant at least 2 of the rest days in each calendar month on Sundays. Employees in establishments directly serving the public will also be provided 7 Sunday days of weekly rest during each year of validity of the employment contract. Via an agreement, 3 of such Sundays may be replaced by Saturdays, provided it is arranged in a manner along with Sunday also on a weekly rest day. This right to Sunday rest may not be compensated in money, nor accumulated from one year to another. This rule will not apply with respect to employees who are hired for a period of thirty days or less, and those whose ordinary working hours do not exceed twenty hours a week or are hired exclusively to work on Saturdays, Sundays, or holidays.

 

In cases where the employee has to provide services in separate locations of the employer’s company, the parties may agree on regular working hours of up to two weeks without any interruption, at the end of which compensatory rest days of the Sunday or public holidays that have taken place in that 2 week period, increased by one, shall be granted. Labour Code, art 35-38 (last amended 2021).

Public Holidays

The following 17 paid public holidays are observed in Chile:

  • Jan. 1: New Year’s Day
  • Good Friday
  • Holy Saturday
  • May 1: Labor Day
  • May 21: Navy Day
  • Closest Monday to June 29: Holiday of St. Peter & Paul
  • July 16: Holiday of Our Lady of Mount Carmel
  • Aug. 15: Holiday of the Assumption of Mary
  • Sept. 17-19: National holiday, Army Day and Independence Day
  • Closest Monday to Oct. 12: Columbus Day
  • Closest Friday to Oct. 31 (unless the date falls on a Thursday): Reformation Day
  • Nov. 1: All Saints’ Day
  • Dec. 8: Holiday of the Immaculate Conception
  • Dec. 25: Christmas
  • Dec. 31: bank holiday (typically a shortened workday but not a full holiday in other sectors)

Holidays will begin at the latest at 9:00 p.m. on the day before Sunday or a holiday and will end at 6:00 a.m.

 

Special Days 

January 1, May 1, September 18, 19, and  December 25 are mandatory and non-waivable holidays, and no employee can be asked to work during these days.

 

The holidays corresponding to June 29 (Saint Peter and Saint Paul’s day) and October 12 (the day of the discovery of two worlds), is moved to Monday of the week in which they occur, if it corresponds to Tuesday, Wednesday or Thursday, or on Monday of the following week, if it corresponds to Friday.

 

When dates September 18 and 19 correspond to Tuesday and Wednesday, the celebrations are moved to the previous Monday. When they correspond to Wednesday and Thursday, they move to the following Friday.

 

Pay for Work on Holiday

There is no provision for premiums for regular work on holidays. Employers must grant 1 day of rest within the following week in compensation for the work carried out on each holiday in which the employees had to provide services. 

 

Overtime work on a Public Holiday 

If the hours worked on a public holiday exceed the ordinary weekly working hours, the employee will be paid an overtime rate which is a 50% premium. Labour Code, Art 35-38 (last amended 2021). 

Annual Leave

Employees with more than one year of continuous service will be entitled to an annual holiday of 15 working days, with full remuneration. The holiday cannot be compensated in money. Every employee, with ten years of work, for one or more employers, continuous or not, will be entitled to an additional day of holiday for every three years worked, and this excess will be susceptible to negotiation via individual or collective agreement. 

 

Employees who provide services in the Twelfth Region of Magallanes and Antartica Chilean, in the Eleventh Region of Aysén of General Carlos Ibáñez del Campo, and in the Province of Palena, will be entitled to an annual holiday of 20 working days.

 

For the purposes of the holiday, Saturday will always be considered non-working. The holiday must be continuous, but the excess in 10 business days may be split by mutual agreement. 

 

Accrual of annual vacation – Vacation time can be accrued for up to 2 consecutive years. An employer whose employee has accumulated 2 consecutive years of holidays, must grant at least half of the holiday before completing the year that entitled the employee to a new period.

 

During the holiday, the monthly remuneration will be constituted by the fixed salary in the case of employees subject to the fixed payment system. In the case of employees with variable remuneration (deals, commissions, bonus, etc), the remuneration will be the average of earnings in the last three months worked.

 

Timing of vacation – The annual vacation will be granted preferably in spring or summer, considering the needs of the service.

 

Payment on Termination

If the employee, having the necessary requirements to make use of the holiday, exits the company due to any circumstance, the employer must compensate him for the time that he would have been entitled to as a holiday.

 

However, the employee whose contract ends before completing the year of service that entitles a holiday will receive compensation for that benefit, equivalent to the full remuneration calculated in proportion to the time that elapses between his hiring or the date he found out the last annuity and the term of their functions. Labour Code, art 67-73 (last amended 2021). 

Minimum Wage

Effective September 1, 2020, the minimum wage in Chile is CLP 326,500.

Special Leave

Maternity Leave

Female employees will be entitled to a maternity break of 6 weeks before delivery and 12 weeks after delivery. If the birth occurs after six weeks after the date on which the woman had begun the maternity leave, the Prenatal rest will be extended until the delivery. When delivery occurs before the thirty-third week of gestation, or if the child at birth weighs less than 1,500 grams, the postnatal rest will be 18 weeks.

 

If as a consequence of the delivery there is a disease proven with a certificate, which prevents returning to work for a period longer than postnatal rest, the duration may be extended. In the case of deliveries of two or more children, the postnatal rest period shall be increased by 7 consecutive days for each child born after the second.

 

If both parents are employees, either of them, at the mother’s choice, may enjoy the parental postnatal leave, from the 7th week, for the number of weeks that the mother indicates. If the mother died in childbirth or during the period of leave after it, said leave or the rest of it that is given to the mother of the child will be granted to the father or to whom it is granted custody of the minor.

 

Pay

The payment for maternity leave is made by the Social Security system and not by the employer. There is an additional permit of 12 weeks (during which female employees will receive the same subsidy of the pre – and postnatal maternity leave) that starts immediately after the termination of postnatal maternity leave. Female employees may choose between this new permit or working half of their ordinary working hours for 18 weeks (part-time) In latter case, the subsidy granted by the Social Security System is reduced to 50% of its salary and the employer must pay, at least, 50% of the remuneration set forth in the labor agreement and all variable remuneration to which she is entitled.  Likewise, the mother may benefit the father of the child by granting him part of the parental postnatal leave. In this case, the subsidy will be paid according to the salary of the father. 

Breastfeeding Breaks

The employees will have the right to have at least 1 hour a day, to feed their children under two years of age. This right may be exercised in any of the following forms to be agreed with the employer:

      • At any time during the working day
      • Dividing it, at the request of the interested party, into two portions.
      • Postponing or advancing by half an hour, or an hour, the beginning or end of the day of work.

The time consumed for the purpose of breastfeeding shall be considered as working time and cannot be in any case, waived by the employees who have children under the age of 2 years. Labour Code, art 195-208 (last amended 2021).

Paternity Leave

The father will be entitled to a paid leave of 5 days in the event of the birth of a child, which may be used at his choice from the moment of delivery, and in this case will be continuous, excluding the weekly rest, or distributed within the first month from the date of birth. This permission will also be granted to the father who is in the process of adoption and will be counted from the notification of the resolution granting personal care or foster the adoption of the child. Labour Code, art 199 (last amended 2021).

Child Care Leave

Employee mother with a child under 1 year of age dealing with serious illness shall be allowed to take leave and allowance in cases of prenatal, postnatal, and paternal postnatal leaves, during the period prescribed by the health service. This right shall extend to the spouse or civil partner. If both parents are entitled, it would be the mother’s choice, as to who would be entitled. 

 

Employee (both the father and mother) with a child older than 1 year and below 18 years, who has suffered from a serious accident or life-threatening illness, shall be entitled to a paid leave of absence for the number of hours equivalent to 10 working days per year, distributed at the employee’s choice in full, partial or combined days. Labour Code, art 199 bis (last amended 2021).

Family Care Leave

When the spouse, the civil partner, the father, or the mother of the employee are in a terminal state, the employee may be provided with 10 working days of paid leave with the means of a medical certificate. Labour Code, art 199 bis (last amended 2021).

Sick Leave

There is no annual limit on the number of days of sick leave that an employee can take, this will depend on the medical license extended by the doctor. Supreme Decree No. 44 of 1978 (last amended 2021).

Adoption Leave

If women, single men, or widowers are interested in adopting a child, such employee shall be entitled to a period of 1 year of unpaid adoption leave, from the date when the court grants the adoptive parents the custody of the child. If the minor is less than 6 months old the parent is entitled to an allowance for adoption for a period of 12 weeks.

Paternity leave will also be granted to the father who is in the process of adoption and will be counted from the notification of the resolution granting personal care or welcome the adoption of the child. Labour Code, art 201 (last amended 2021).

Marriage Leave

In the event of contracting marriage or entering into a civil union agreement, every employee shall be entitled to 5 continuous working days of paid leave, in addition to the annual holiday, regardless of the time of service. Labour Code, art 207 bis (last amended 2021).

Bereavement Leave

Employees are entitled to 7 calendar days of paid bereavement leave for the death of a child or spouse/civil partner. This is in addition to annual leave and may be taken regardless of time worked. In the case of the death of a parent, the employee is entitled to 3 business days’ leave from the date of death. If an unborn child dies, any employee (male or female) is entitled to 3 business days’ leave from the date when death is confirmed with the appropriate fetal death certificate. There is one-month tenure protection for employees who suffer the death of a child or spouse beginning from the date of death. Labour Code, art 66 (last amended 2021).

Medical Examination Leave

Female employees over 40 years of age and older and male employees over the age of 50 who are employed for a term greater than 30 days, will have the right to half a day’s leave, once a year during the term of the employment relationship, to undergo mammography and prostate examinations, respectively, and may include other benefits of preventive medicine, such as a pap smear, in public health institutions or private institution. 

 

The time required for taking such examinations will be considered as hours worked by an employee, and permits for such leave cannot be compensated in money even after the termination of employment. Labour Code, art 66 bis (last amended 2021).

Vaccination Leave

In the cases of public vaccination programs or campaigns for the control and prevention of communicable diseases, all employees shall be entitled to half a day’s leave for vaccination. Labour Code, art 66(bis) (last amended 2021).

Military Service/Training Leave

An employee retains the right to the job without pay while doing military service or being part of the mobilized national reserves. However, Employers are required to pay regular wages to reserve personnel called to service for less than 30 days. Labour Code, art 66 158 (last amended 2021).

Last updated on: July 16th, 2021