Chile

Overview of Chile

Chile is a long, narrow country along the western coast of South America. At 4270 km in length, it is the second longest country in the world. Santiago de Chile is the capital and the population of Chile is 18.85 million. The official language is Spanish. It has 56 provinces. Chile is home to the tallest building in South America – Costanera Gran Torre. It is located in Santiago. It is also home to the driest desert on Earth – the Atacama Desert. Chile is the world’s fifth largest wine exporter. Chile is home to 5 UNESCO world heritage sites. More than half of Chile’s plants and animals can only be found in Chile and nowhere else in the world. The world’s largest swimming pool can also be found in Chile.

The business atmosphere in Chile is more formal than in the rest of South America. Dress appropriately and always be on time for meetings, even if the Chileans may be up to 30 minutes late. Use surnames and titles until offered otherwise. During the first business meeting, the Chilean side will be looking to build up a relationship, so expect a lot of small talk and wait for the host to change the topic to the business at hand. Provide all information necessary in a meeting as the decisions will only be made after the meeting.

Currency of Chile

• Chilean Peso (CLP)

Health Insurance and the Social Security system of Chile

Chile has a dual healthcare system – the public National Health Insurance Fund or any of the countries private health insurance companies. It is a dual healthcare system and citizens can decide to be insured in either.

The healthcare system of Chile is funded by universal income tax deduction of 7% from every employee. The public health system is funded wholly by the government using general tax revenue. Many private health insurances encourage employees to pay a variable extra on top of the 7% premium to upgrade their basic health plans.

The public health system offers free medical, dental, nursing and midwifery services at the local healthcare centers.

Employer cost of Chile

The cost for an employer to hire someone in Chile is a plus of 5% to the gross salary.

Salary and bonuses of Chile

Regular employees are paid monthly.

This is no statutory bonus however many companies pay a bonus in September (national holidays) and another in December (Christmas).

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Public Holidays in Chile

Regular employees are paid monthly.

This is no statutory bonus however many companies pay a bonus in September (national holidays) and another in December (Christmas).

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Working Hours in Chile

Office hours are from 8:30am to 6:00pm, Monday to Friday.

A regular work week is 45 hours.

Overtime is not allowed to be more than 2 hours a day or 10 hours a week. Employees are paid 150% for any overtime worked.

Vacation in Chile

Employees who have worked for more than 1 year with the company are entitled to 15 working days of paid holiday.

Sick Leave in Chile

When one falls sick in Chile, a medical license – licencia médica – is required within 2 days of the sick leave. The employer then has to forward this to the health insurance who pays the sick leave within 3 days,. For the first 3 days of an illness, the employee is not entitled to sick pay. From the 4^th day onwards, employees are entitled to sick pay. However, there is a cap on the amount the employee can receive. After the 10^th day, an employee receives sick pay for all the days he/she was will. There is no limit to the annual number of days of sick leave for an employee.

Termination/Severance in Chile

In order to terminate an employee in Chile, one must have a valid reason. A valid reason is either by mutual agreement, breach of contract (employer must be able to provide proof) or if the company needs to reorganize.

A termination letter must be written, stating the cause of the termination, and it must be delivered either personally or sent by certified mail. The same letter must be sent to the Chilean Labour Ministry.

After the termination letter has been sent, a severance agreement stating the cause for termination and the amount of severance pay the employee will receive must be prepared and signed by the employee within 10 days.

The notice period is 1 month.

If the employee has worked for the company for 1 year or longer, he/she is entitled to severance pay. For every year of service up to 11 years, the employee is entitled to 1 months salary severance pay.