Chile

Labor Compliance Guide

Labor Requirements

The employment law in Chile is governed by the Labour Code. The other Acts 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, etc. 

Hours & Pay Regulations

Normal Working Hours

The duration of the ordinary day of work shall not exceed 45 hours weekly. The daily ordinary hours may not exceed 10 hours. A week distributed in no more than six and no fewer than five days. 

 

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 such limits. Labour Code, art 22.

 

Recording Requirement

The employer shall keep a register consisting of a staff assistance book or on a watch with registration cards for the purposes of controlling attendance and determining working hours, be ordinary, or overtime work. Labour Code, art 33.

 

Part-Time Work Week

The Labor Code regulates a special contract called “part-time”. 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 – 40bis B.

Overtime

The Overtime pay rate is 50 percent of the normal hourly wage and must be paid when work exceeds 45 hours per week or the daily overtime limit. The daily overtime limit is up to 2 per day. No employee can work more than 12 hours a day, this includes overtime hours. The Law does not define weekly or quarterly or annual limits on overtime.

 

Through an agreement between the parties, workers can choose to take compensatory leave instead of receiving additional compensation for overtime. Labour Code, art 32 & 40 A.

Night Work

Night work is work performed between 10:00 p.m. and 07:00 a.m. the next day. 

Breaks

The workday must be divided into two periods, leaving between them at least a half-hour break for lunch, which must not be considered for the purposes of determining the duration of the workday. Labour Code, art 34.

Work On Rest Days

The working day will be divided into two parts, leaving between them, at less, the half-hour time for the snack. This intermediate period will not be considered worked to compute the duration of the daily work. Labor Code, art 34.

Sunday Work

Sundays will be a holiday. Rest days and 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. the day after, except for time changes that occur due to the rotation of work shifts. The Labor Code establishes that at least 2 days of rest per month must be enjoyed on Sunday.

 

The weekly rest days may not coincide with the holidays listed under public holidays.

 

Pay for Work on Sunday or Rest Day

Employers must grant 1 day of rest per week in compensation for the work carried out on Sunday. The establishments exempted from providing Sunday as a rest day are allowed to distribute their normal working day in a form that can include Sundays and holidays as working days.

 

Overtime on Rest Day or Sunday

Any overtime work performed on rest day 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 dependent upon the hours worked before or after the said date. 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.

 

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 that 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 workers 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. Workers 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 workers 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 an 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. 

Public Holidays

The following 15 paid public holidays are observed in Chile:

  • Every Sunday of the Year
  • 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)

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

Employers must grant 1 day of rest per week in compensation for the work carried out on for each holiday in which the workers had to provide services. If the hours worked on public holidays exceed the ordinary weekly working hours, the employee will be paid at an overtime rate which is 50% premium. There is no provision for premiums for regular work on holidays. Labour Code, Art 35-38. 

Annual Leave

Employees with more than one year of service will be entitled to an annual holiday of 15 working days, with full remuneration. The holiday cannot be compensated with money.

 

Every employee, with ten years of work, for one or more employers, continuous or not, you 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.

 

For the purposes of the holiday, Saturday will always be considered non-working. The holiday must be continuous, but the excess in ten business days may be fractionated by common agreement. The holiday may also be accumulated by agreement of the parties, but only for up to two consecutive periods.

 

An employer whose employee has accumulated two consecutive periods of holidays, must at least grant first of these before completing the year that entitled the employee to a new period.

 

During the holiday, the remuneration integral shall be constituted by the salary in the case of employees subject to the system of fixed remuneration. In the case of employees with variable remuneration, full compensation will be the average of what has been earned in the last three months’ worked.

 

Payment on Termination

The holiday cannot be compensated with money. But If the worker, 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 worker 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.

Minimum Wage

As of March 1, 2020, the amount of the minimum monthly income for workers over 18 years of age and up to 65 years of age was readjusted, reaching 320,500 Chilean pesos per month.

Special Leave

Maternity Leave

Female employees will be entitled to a maternity break, 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 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 correspond to the father or to whom it is granted custody of the minor.

 

Payment

This payment 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 the 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. 

Nursing Breaks

The workers will have the right to have at least 1 hour a day, to feed her 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 worked 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.

Paternity Leave

The father will be entitled to a paid leave of five 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.

Child Care Leave

When the health of a child under one year of age requires attention at home as a result of a serious illness, which circumstances will be demonstrated through a medical certificate issued by the services in charge of the infant’s health, the employee mother will be allowed to leave and subsidy allowance in cases of prenatal, postnatal and paternal postnatal leaves, during the period prescribed by the health service. 

 

If both parents are under a labor agreement, either one of them, at the mother’s choice, will be able to use this permit and will be entitled to the corresponding subsidy allowance. 

 

When the health of a child older than one year and under eighteen years of age requires the personal care of his or her father or mother in the event of a serious accident or of a serious, acute, and life-threatening illness, both the father and mother shall have the right to a leave of absence from her work 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.

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.

Adoption Leave

In the case of women or single men or widowers who manifest to the court their willingness to adopt a child, the term of one year shall be counted as adoption leave from the date on which the judge, by means of a resolution issued to that effect, entrust the employees with the personal care of the minor or grant him the tuition. When the minor is less than six months old, will be entitled to a permit and allowance for twelve-week.

 

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 foster the adoption of the child. Labour Code, art 201.

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 207bis.

Bereavement Leave

Employees are entitled to 7 calendar days of paid bereavement leave from the date of death of a child or spouse. 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 worker (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.

Leave for Medical Exam

Female employees over forty years of age and older and male employees over the age of 50 whose employment contracts 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 permit for such leave cannot be compensated in money even after the termination of employment. Labour Code, art 66bis.

Military Service/Training Leave

Employees’ jobs are guaranteed without loss of seniority if they are called to military service or training. Employers are required to pay regular wages to reserve personnel called to service for less than 30 days. Labour Code, art 66. 

Last updated on: October 7th, 2020