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Employment contracts and policies in Chile

Contract terms in Chile

Fixed-term contracts in Chile

Contract extensions in Chile

Working hours in Chile

Remote work in Chile

Employment contracts in Chile

Every country has its own rules and requirements when it comes to employment contracts — and Chile is no exception. For example, while written contracts are mandatory in Chile, probationary periods are not recognised under the law. Fixed-term contracts are common, but strict limits apply. Employers must also be aware of evolving legislation around working hours and remote work, both of which have seen significant changes in recent years.

In this section, we’ll walk you through the key requirements for employment contracts in Chile. You’ll find guidance on mandatory and optional contract terms, fixed-term contract rules, maximum working hours, and employee obligations related to remote workers.

Employment contracts and policies in Chile

Employers should be aware of the rules surrounding employment contracts and policies in Chile if they want to ensure compliance and protect both their employees and their business interests — read on for what you need to know.

Written employment contracts in Chile

Written employment contracts are mandatory in Chile and must be provided to each employee within 15 days of employment. If an employer fails to meet this obligation, employment terms alleged by the employee are considered valid. Chilean employment contracts must include certain key terms, including a description of the work, the place of work, and information about the employee’s remuneration package.

Third-party approval for employment contracts in Chile

Unlike in some other countries, there is no obligation to lodge employment contracts with a third party for approval in Chile. However, all new employees must be registered with the Labour Office (Dirección del Trabajo) within 60 days of hiring.

Probationary periods in Chile

With the exception of domestic workers, Chilean law does not recognise formal probationary periods. Instead, employers frequently use fixed-term contracts of up to 12 months to assess suitability for a role. These are treated as regular contracts under law and carry full protection rights and automatically convert to an indefinite contract if they are extended beyond the legal limit of two years (12-month contract with one renewal).

Mandatory employment policies in Chile

Employers in Chile with 10 or more permanent workers must implement and register a document called a Reglamento Interno de Orden, Higiene y Seguridad. This must incorporate rules on workplace safety and discipline. Smaller employers are exempt from this requirement but must still maintain basic written hygiene and safety regulations.

Contract terms in Chile

The Chilean Labour Code requires employers to include certain key provisions in their agreements with employees — read on to learn what has to be included for a contract to be considered valid in Chile.

Mandatory contract terms in Chile

All employment contracts in Chile must include at least the following terms:

Place and date of the contract.
Identification of both parties.
Contract start date.
Job title and description.
Place of work (or primary location).
Remuneration including salary, benefits and allowances.
Duration and distribution of working hours.
Whether the contract is fixed-term or indefinite.

Additional contract terms in Chile

Employees in Chile can also choose to include additional clauses in their contracts. These are not legally required but are frequently added to clarify expectations or protect business interests. For example, you could add:

A confidentiality clause: This will prevent an employee from sharing trade secrets or confidential information. It must be reasonable in scope to be permissible.
An intellectual property clause: These confirm that inventions or creative work produced during employment belong to the employer unless otherwise agreed.
A non-compete or non-solicitation clause: These prevent employees from competing with the employer or poaching their clients and/or employees. They may apply only during employment or after the contract ends (subject to certain conditions).

Fixed-term contracts in Chile

Employees in Chile are generally engaged on an indefinite (permanent) basis. However, if an employee only requires an employee’s services for a short period, they can offer them a fixed-term contract. The duration of a fixed-term contract must be set at the time of hiring. Read on to learn about the rules that apply to fixed-term contracts in Chile.

Fixed-term contracts in Chile

Fixed-term contracts in Chile are usually limited to a maximum duration of 12 months (one year). This may be extended to two years for management positions or employees with professional or technical qualifications from a higher education institution. Contracts that are continued beyond this limit are considered indefinite permanent contracts.

Reasons for using a fixed-term contract in Chile

Employers in Chile must have a genuine reason for using a fixed-term contract and may have to justify their temporary requirement in the case of a legal challenge. Fraudulent or arbitrary use of fixed-term contracts in Chile can lead to reclassification of the contract as an indefinite agreement.

In practice, fixed-term contracts in Chile are often used in place of probationary periods for permanent employees, since these are not provided for in Chilean labour law. Other reasons or using them might include the temporary replacement of a staff member or the need to cover a short-term increase in workload.

Contract extensions in Chile

Fixed-term contracts generally come to an end at the expiry of their term. However, employers may choose to renew (extend) a fixed-term contract if they still require the employee’s services. Read on for what you need to know as an employer.

Ending a fixed-term contract in Chile

In general, employers do not need to provide an employee with notice to end their fixed-term contract on its expiry date. This is not counted as dismissal, and no severance pay is required. If a fixed-term contract is terminated early by the employer, the employee is entitled to compensation equal to their remaining salary, up to the maximum term of 12 months or 24 months.

Contract renewals or extensions in Chile

An employer in Chile can choose to renew an employee’s fixed-term contract one time only, for a maximum of one year. If the employer renews the contract a second time or the employee continues to work after the contract’s expiry with the employer’s knowledge, the arrangement is automatically converted to an indefinite contract.

Working hours in Chile

Maximum working hours in Chile are set by the Labour Code, which also contains provisions on mandatory breaks and rest periods. Read on to find out what you need to know as an employer.

Standard working hours in Chile

The standard full-time working week in Chile is currently 44 hours, which can be spread over four, five, or six days. There is a daily limit of ten hours. However, the working week in Chile is currently being reduced from 45 hours to 40 hours thanks to a law introduced in 2023. The law is being implemented gradually, as follows:

From April 2024: 44 hours per week.
From April 2026: 42 hours per week.
From April 2028: 40 hours per week.

Employers must reduce employees’ working hours in line with these guidelines without a reduction in pay. Many workplaces have already implemented 40-hour workweeks ahead of the new regulations.

Overtime in Chile

Overtime is only permitted in Chile in temporary or urgent circumstances, up to a maximum of two hours per day. It’s regulated by the Labour Code and must be agreed in writing with employees.

Overtime must normally be compensated at a rate of at least 150% of normal wages. Alternatively, employers can choose to grant employees additional time off at a rate of 1.5 hours per hour of overtime, up to a maximum of five days per year. Employees must use these additional leave days within six months.

Exemptions from maximum working hours in Chile

Certain employees are exempt from maximum hour requirements in Chile. This includes:

Managers, administrators and executives.
Employees who provide services without immediate supervision.
Employees who do not work on company premises.

If there is a dispute between the parties about the applicability of working hours laws, it must be resolved by a labour court.

Breaks and rest periods in Chile

Employees in Chile are entitled to a daily break of at least 30 minutes. This is generally not paid or considered part of the working day. Employees are also entitled to a weekly rest period of at least 48 consecutive hours, which must usually include Sunday. Employees who work on Sundays or holidays due to the nature of their work are entitled to compensatory time off.

Remote work in Chile

As in many other countries, remote work has increased significantly in Chile in the years since the pandemic. For this reason, the country has introduced a specific law confirming the rights and obligations of remote workers and their employers.

Remote work law in Chile

Remote and distance working in Chile is governed by Law No. 21.220, which was introduced in 2020. According to the law, remote work must be agreed on in writing between employers and employees, either at the time of hiring or via amendment. This agreement must be registered with the Labour Directorate within 15 working days.

Employer obligations related to remote work in Chile

Employers in Chile have certain obligations towards their remote employees. For example, they must guarantee the right to digital disconnection for at least 12 hours in each 24-hour period. Employers must also comply with health and safety regulations for remote employees, including risk assessments, training, and ensuring ergonomic workstations. Lastly, employers must provide necessary work equipment like computers and software and reimburse remote workers for increased costs for things like internet usage or electricity.

Tailored employment contracts in 100+ countries

Like all countries, Chile has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.

Thankfully, our team is experienced in drawing up tailored, compliant contracts in Chile (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.

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