Hiring in Chile has compelling benefits for employers located elsewhere. Countries in Latin America have established a reputation for their strong tech presence, and Chile is no exception. With a population of 19 million, including many well-educated and bilingual professionals, the country is an attractive hiring destination. It has excellent universities, and for employers in North America, its time zones align conveniently. Chile has a strong and stable economy, and aside from tech, it’s also a premier destination for mining and manufacturing operations.
However, when hiring in any remote destination, there are unique challenges to consider. The processes of onboarding international employees can be complex, and to address these hurdles, many organizations turn to an employer of record (EOR).
If you’re expanding your talent pool to include Chile, here are some considerations for evaluating EOR services, as well as alternative options to explore.
Pros and cons of using an EOR to hire in Chile
An employer of record (EOR) is an organization that hires employees on behalf of another company. An EOR may be located within the same country as your business, or in a foreign nation with different employment regulations. Working with an EOR enables you to hire remotely without having to establish a subsidiary in a different country.
EORs can oversee a number of tasks on your company’s behalf, including legal and tax functions, HR and payroll, and hiring. With their ability to handle a range of employment responsibilities as a third-party organization, EORs allow companies to expand rapidly into new markets.
Benefits of working with an EOR
Working with an EOR in Chile has clear benefits for companies that choose this route. It allows for a fast, simple entry into the country’s desirable market while helping you comply with local labor laws and mitigate cross-border tax risks.
Chile has a complex regulatory landscape for employers, including strict overtime laws and mandatory notice periods. Satisfying these requirements can be a complex process for HR and compliance teams located abroad, and an EOR can ease the administrative challenges of managing employees in Chile.
EORs also offer firsthand knowledge of the local market, including cultural norms and local employment practices, which can be advantageous for employers headquartered elsewhere. It enables companies to position themselves in a way that will attract top Chilean talent.
Limitations of employer of record services
Working with an EOR may make sense for some companies, but not others. EORs often provide services in a particular country, so if you’re expanding your workforce beyond Chile, you’ll need to find new EOR partners for each country. For businesses with larger expansion goals, finding a new EOR for each market they enter can become a significant drain on their time and resources.
Vetting several different EORs to find the right global employment partner for your company is an arduous task, especially for HR teams that are already juggling a heavy workload. Each EOR has its own unique operating model, and one may be better suited to support your goals than the next. Costs are also worth considering: pricing can vary significantly across EORs, and while working with an EOR is significantly less expensive than setting up a foreign entity, they can become expensive when working with multiple vendors across different geographic regions. These factors are important to consider when calculating the costs of hiring global talent.
The bottom line: If you’re only looking to hire in Chile, an EOR could be right for you, but there are other solutions to consider—especially if you have your sights set on other markets.
Things to know about hiring in Chile
Every country, including Chile, has its own unique employment laws that may differ from those in your own country. While it’s important to establish a robust understanding of labor and tax laws in any new hiring destination, familiarizing yourself with some of the most noteworthy regulations can set you up for success when working with Chilean talent. Here are some considerations to bear in mind.
Notice period
The notice period for Chile is thirty days. Employers often waive the notice period and make a payment instead. The payment should not exceed 90 inflation-indexed units (UFs).
Overtime
In Chile, the standard workweek is set at 44 hours for 2024, which can be spread across each week or averaged over up to four weeks. Overtime may not exceed two hours per workday, or 10 hours per week, and the normal workday should not exceed 10 hours. Overtime is paid at a rate of 150% of the employee’s regular pay.
Vacation time
Paid vacation varies based on the employee’s region. Typically, employees are eligible for 15 to 20 days of paid vacation annually. Employees who have been with a company for 10 or more years receive one additional working day off for every three years of service.
Termination
Employers must provide a valid reason for terminating an employee’s contract. Reasons may include a breach or expiration of contract, resignation, mutual agreement, or company needs.
Bonuses
Although employers aren’t legally obligated to do so, many give out bonuses twice a year. Known as the Aguinaldos, these payments are made in September and around Christmas.
Holidays
There are 13 national holidays that are eligible for paid time off (PTO) in Chile. On Sundays and national holidays, employees generally have the day off work, unless there are special permissions granted by law. Some companies, however, are allowed to schedule work on these days. In such cases, employees who work on Sundays or holidays usually receive overtime pay for those hours, especially if they exceed the regular weekly working hours.
Leave
Employees who are pregnant can receive six weeks of prenatal leave and 12 weeks of postnatal leave, paid in full by the Chilean Social Security System. Employees may not be dismissed for up to a year following the conclusion of their postnatal leave. Chile also requires employers to offer paid leave for other circumstances, including illness or disability, bereavement, marriage, and adoption.
Hiring in Chile with Oyster’s global employment platform
If you’re seeking an alternative to using an employer of record to hire people in Chile, there’s another option: using a global employment platform like Oyster. With an automated, all-in-one platform, Oyster enables hassle-free onboarding and talent management for remote workers both in Chile as well as virtually anywhere in the world.
Oyster offers a compliant and seamless solution for managing all your global employment needs, from locally compliant contracts to onboarding, payroll, benefits administration, equity, and more. The platform offers self-serve knowledge and tools to help you confidently make informed decisions, so you can be a competitive employer anywhere in the world.
Find out more about how Oyster can help you hire in Chile and more than 180 countries across the globe.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
