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.

The maximum workweek in Chile is 44 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 18 weeks of paid maternity leave, starting 6 weeks before the delivery and continuing for 12 weeks after. The leave is paid by the country’s health insurance provider (FONASA or ISAPRE), up to the statutory cap. It applies to all employees, regardless of contract type or seniority.

Fathers receive 5 consecutive days of paid leave after the birth and can also share some of the mother’s maternity leave after 7 weeks, which is paid at 100% of the normal salary.

Sick Leave

Employees are entitled to sick leave as medically required, subject to validation by their health insurance provider. This entitlement is available from the first day of employment, provided that the required documentation is submitted.

A medical certificate (licencia médica) must be presented within two (2) business days from the commencement of the sick leave.

• Days 1–3: Unpaid, unless the employer elects to provide payment voluntarily.
• From Day 4 onwards: Paid by the employee’s health insurance provider (FONASA or ISAPRE), based on the employee’s average salary, subject to statutory caps.

Paid Leave

Chile observes 19 public holidays each year.

Employees with at least one (1) year of continuous service are entitled to fifteen (15) working days of paid annual leave per year. Leave accrues at a rate of 1.25 working days per month and may be calculated either on a calendar-year basis or from the employee’s work anniversary date.

Process

In Chile there is no at-will termination, meaning employers must provide cause for terminations. The following are considered valid reasons:

• 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, which must be paid on a monthly basis. The amount is equivalent to twenty-five percent (25%) of the employee’s monthly base salary, subject to an annual cap of 4.75 times the statutory minimum monthly wage.

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