What should an employment contract in Chile include?
An employment contract in Chile should encompass the following information:
- Names, identification details, and nationality of the employer and employee.
- Place and date of contract execution.
- Employee’s job title, duties, and nature of services.
- Place of work or the geographic area where services will be performed.
- Specified working hours and distribution of the work schedule.
- Agreed salary, payment method, frequency, and any additional benefits (including benefits in kind such as housing, food, or transport, if applicable).
- Duration of the contract (fixed-term, indefinite, or project-based).
- Any additional agreements between the parties, including bonuses or allowances.
Both the employer and employee must carefully review the terms before signing the contract. Under Chilean law, the employer must document and sign the contract within 15 days of the employee’s start date (or within 5 days for short-term or project-based contracts).
Under Chilean law, the employment contract is considered consensual, meaning the relationship exists once services are provided and remuneration is paid. However, the employer is legally required to formalise the agreement in writing.
If the employer fails to formalise the contract within the legal deadline, the terms claimed by the employee may be presumed to be correct.
What types of employment contracts exist in Chile?
Chilean labour law recognises individual, collective, and special employment arrangements. In practice, these include the following common contract types:
1. Individual labour contract
This is the most common type of employment contract in Chile. It is an agreement between an employer and an employee where the employee provides personal services under subordination and dependency, and the employer agrees to pay remuneration for those services.
There are two main types of individual contracts:
- Fixed-term contract:
A contract with a defined start and end date. In most cases, it cannot exceed one year (or two years for managers, professionals, or technicians). If the employee continues working after the end date, the contract automatically becomes indefinite. - Indefinite-term contract:
An open-ended contract with no specified end date. The employment relationship continues until either party terminates it in accordance with legal notice and termination rules.
2. Collective labour agreements
Collective agreements are contracts between one or more employers and a group of employees (usually represented by unions). These agreements establish common working conditions, salaries, and benefits, must be in writing and registered with the Labour Authority, and have a fixed duration, typically between 2 and 3 years.
3. Project-based (specific task) contract
A project-based contract is used when an employee is hired for a specific task, project, or service. The contract duration is linked to the completion of the project. It ends once the assigned work is completed, and these employees are entitled to statutory benefits, including paid leave and, in some cases, specific termination compensation.
4. Subcontracted and temporary employment
Chilean law allows companies to hire workers through subcontractors or temporary staffing arrangements. Subcontracting is commonly used for specialised services such as cleaning, security, or catering. The main company may be held jointly or subsidiarily liable for labour and social security obligations, and temporary employment is only permitted in specific situations defined by law and for limited periods.
How to hire employees in Chile?
Typically, when hiring employees in Chile, companies must establish a legal entity and comply with local labour laws, including contract registration and documentation requirements. Employers must also register the employment contract electronically with the Labour Authority within 15 business days of execution.
However, with Native Teams’ employer of record services, you can hire employees in Chile without setting up a local entity. We handle compliance, payroll, and employment responsibilities, allowing you to focus on growing your business globally.
