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Employee Rights in Chile

General Employee Rights in Chile

Employment contract

Companies must provide employees with a written employment contract, which must be signed by both parties at least 15 days before the beginning of employment. Each party should be given a copy of the contract for their records. The contract can be in a language that both parties are familiar with, but the official copy should always be in Spanish.
The following provisions should be included in the employment contract:

  • Name, nationality, and birthdate of the employee
  • Name of the employer
  • Description of services to be performed by the employee
  • Type of work
  • Place of work
  • Duration and distribution of the working day
  • Salary in Chilean peso, and any bonuses if applicable
  • Method and period of remuneration
  • Start date
  • Type and term of contract
  • Additional benefits, if applicable
  • The date and place of the contract execution

It is common for companies to add provisions regarding non-disclose, exclusivity, and post-employment restrictive covenants on non-solicitation and non-compete.

Payslip

It is mandatory for companies to provide employees with a monthly payslip. Online payslips are acceptable, but employees must expressly consent to have their payslip processed and submitted electronically.

Right to disconnect

Distributed employees who are free to choose how to distribute their working hours, and teleworkers not subject to working hour restrictions have the right to disconnect and should not be contacted nor made to work by the employers for at least 12 uninterrupted hours in any 24-hour period.

In this period, employers are not allowed to expect the employee to respond to communications, orders, or other requests. In addition, employers are not allowed to communicate or make orders or other requests on days falling within these employees’ rest, leave, or annual vacation periods

Health and Safety

Employers have the duty to provide a healthy and safe workplace to employees, which includes drawing up a policy on “internal regulations” regarding health and safety. Employees are automatically insured against occupational illness and injury through the statutory insurance included in the social security program.

Companies with more than 25 employees are required to create a Permanent Safety, Hygiene, and Risk Prevention Committee (comité paritario de higiene y seguiridad), which should have representatives on both the employee side and the employer side. This committee must help adopt all necessary measures to avoid work-related accidents and should also recommend any use of safety gear. Employees sitting on this committee cannot be dismissed without authorisation by the labour courts.

Mandatory holidays

On specific dates that are mandatory holidays, employees cannot be made to work, inclusive of retail establishments. The only exceptions are for clubs, restaurants, places of entertainment, or selling fuel and emergency pharmacies; however, employers must still give an alternative day off within the next week.
The following are mandatory holidays:

  • 1 January
  • 1 May
  • 18 September
  • 19 September
  • 25 December

Failure to comply with the mandatory holidays makes an employer liable to a fine of up to 5 to 20 monthly tax units (UTMs), equal to CLP 1,056,840 for each employee affected.

Pregnancy rights

Companies with more than 20 female employees must provide adjoining facilities where mothers can feed their children under the age of two or leave their kids while working.

Equal pay

Companies must pay employees the same salary if the same work is performed, and cannot discriminate or pay less because of the employee’s gender.

Reasonable accommodation

Companies must make the necessary adjustments to adapt the mechanism, procedures, and selection practices in all pertinent matters that are required to safeguard equal opportunities for employees with disabilities.

By 2022, all companies with more than 100 workers will be obliged to require that at least one of the workers in human resources functions must have specific knowledge in matters that promote the inclusion of persons with disabilities in the labour market. It will be understood that the workers who have a certification in this respect, granted by the National System of Certification of Labour Competences established in the law N° 20.267, have this knowledge.

The companies mentioned in the previous paragraph shall promote internal policies on inclusion, which shall be reported annually to the Labour Directorate. They should also develop and implement annual training programmes for their staff to provide them with tools for effective labour inclusion within the company.
Workers who agree with their employers to telecommute or telework, at the beginning or during the employment relationship, shall have the same rights and obligations in terms of safety, health, inclusion, and non-discrimination at work as any other worker.

In accordance with the employer’s duty of protection, the employer must always inform the telecommuter or teleworker in writing about the risks involved in their work, the preventive measures, and the correct means of work in each particular case, in accordance with the regulations in force.

In addition, prior to the start of the worker’s telecommuting or teleworking, the employer shall train the worker on the main health and safety measures to be taken into account when carrying out such work.

The employer shall be obliged to take all necessary measures to effectively protect the life and health of workers who provide services in the form of telecommuting or teleworking, for which purpose the employer shall manage the occupational risks that, due to the agreed form of provision of services, are present in the worker’s home or in the place or places other than the company’s establishments, facilities, or workplaces, which have been agreed upon for the provision of such services.

Protections in Chile

Protection from discrimination

Employees are entitled to anti-discrimination protection in the workplace, based on their colour, age, religion, gender, sexual orientation, civil status, race, union membership, political opinion, origin and nationality. Employees must be given an equal opportunity and treatment in every stage of the employment cycle.

Protection against dismissal

Pregnant employees; those on sick leave; and those on maternity, paternity, parental, childcare and bereavement leave; as well as the president of the health and safety committee and union directors — all enjoy additional protection against dismissal. Companies may terminate the employees in the following circumstances only:

  1. Gross misconduct such as physical aggression, harassment, unjustified absences or abandonment of work, conduct affecting the safety of others, serious breach of employee’s obligation, and wilful act to damage anything related to their job
  2. Company’s reorganisation such as modernisation, decrease in productivity, and changes in the market

If an employee has special protection, the employer can terminate the employee’s contract only with the prior authorisation of a court.

Inclusion of persons with disability

Employees have a right to be provided with reasonable accommodations in the workplace by their employers. Companies with more than 100 employees must adhere to the law regarding labour inclusion of individuals with disabilities, which requires 1% of the workforce to be employees with disabilities. This hiring quota can be met in one of the following ways:

  1. By directly hiring people with disabilities
  2. By directly hiring people with an assigned disability pension from any social security system
  3. Through one of the alternative compliance options the law provides:
    1. Sign service agreements with companies that have hired people with disabilities
    2. Make monetary donations to projects, programs, corporations, or foundations that are referred to in Article 2 of Law No. 19.885

Companies may use alternative measures only if they have a valid reason such as what the company does or the lack of individuals interested in the offers of employment.

When an employee with a disability is hired, companies must register the employment contract online with the Labour Directorate, as well as the modifications and terms of the contract. This must be done within 15 working days from the date the employee is hired.

Every January, companies must inform the Labour Department electronically about the following: how many employees were hired in each month; how many employees have a disability or a disability pension; and how effective it has been in complying with the law, either directly or through an alternative measure.

Data protection

The Chilean Data Protection Regulation requires all data to be processed in a manner consistent with the law only for purposes permitted by the legal system or with the subject’s consent while observing the fundamental rights to privacy of the data subject. The law defines neither what consent nor what authorization of the data subject means, but it must be in writing. Personal data can be used for collection purposes only, except if it was collected from publicly available sources. However, companies still need to apply due diligence when handling the data, and they are liable for damages.

When data has been collected from sources that are not public, companies and employees that have access to it must maintain confidentiality. This is an obligation that remains in place after the function or activity for which the data was collected in the first place is completed. Sensitive personal data, such as facts concerning an individual’s private life, cannot be processed unless the law authorizes it, the data subject expressly consents to it, and it is needed for the provision of health benefits.

Companies are required (1) to destroy any personal data when the purpose of its storage has no legal basis or its validity or accuracy is doubtful or when it has expired and (2) to modify the data when it’s incorrect, misleading, or incomplete.

Employees (and anyone whose personal data is being processed) have the right to access the data and information regarding the source of the data and the purpose it was collected for and request a list of individuals and companies to which such information is transmitted. Data subjects also have the right to request modification on inaccurate, incomplete, misleading, and outdated data concerning them. Subjects can also request that their personal data is deleted when there is no legal basis for storing it, when it has expired, or when they no longer wish for that information to be available.

It is important to highlight that the Chilean law does not regulate processing by third parties and does not restrict transfer of personal data abroad. The person or public body responsible for the personal data bank must compensate for the pecuniary and moral damage caused by the improper processing of the data, without prejudice to proceeding to delete, modify, or block the data as requested by the data subject or, where appropriate, as ordered by the court.

Employee Benefits in Chile

Non-removal of benefit right

Employers are not allowed to change or discontinue any voluntary benefits without the employee’s consent. Moreover, if an informal benefit becomes common practice, it may create an acquired right and part of the employee’s compensation that the company may not unilaterally change.

Childcare

Companies with more than 20 female employees are required to provide adjoining facilities where mothers can feed their children under the age of two or leave their kids while working.
Companies have different options to meet this requirement:

  1. By establishing its own crèche adjoining, but independent of, the workplace.
  2. By establishing a crèche jointly with other companies in the same geographical area.
  3. By paying for the services of a childcare centre recognized by the National Board of Nursery Schools (JUNJI).

Right to feed

Mothers are entitled to take at least one hour each day for the purpose of feeding children under the age of two. This right can be exercised in different ways:

  1. At any moment during the working day, subject to agreement with the employer
  2. Dividing this period into two on the request of the mother
  3. Delaying or bringing forward by half an hour or an hour the start or end of the working day

Legal gratification

It is mandatory that companies provide all employees with a statutory bonus annually in addition to the employee’s base salary. There are two methods that employers can choose to employ regarding the gratification:

  1. Divide 30% of the total net income of the company among all the employees, proportionate to their income.
  2. Pay the employee 25% of wages earned during the year, regardless of the total net income obtained by the company. This bonus is capped at 4.75 times the minimum wage, which corresponds to a maximum bonus of CLP 1,600,750 per year for the year of 2021. Companies may also lower the employee’s base salary stated in the work contract to compensate for the addition of the legal gratification (as a way not to increase the total costs for the employer). However, if the base salary is already agreed on in the employment contract, it cannot be lowered without the employee’s consent.

Workers compensation insurance

Known as “accident and occupational disease insurance” in Chile.Every company must contribute to the insurance to fund the risk of the employment activity. The amount of contribution borne by the company varies according to the risk level of the activity, with a maximum rate of 3.4% of the employee’s salary.

In industries considered to be heavy work, where the level of accident risk is high, there may be an additional contribution paid by both employers and employees of 2% of the employees’ salary.

Covid individual health insurance

Companies must provide a compulsory individual health insurance associated with COVID-19 for employees carrying out work completely or partially in person. They should also implement an occupational health safety protocol that must include at minimum daily temperature testing, safe physical distancing measures, water and soap availability, sanitization, etc. Until the company has put such a protocol in place, employees cannot resume in-person work activities. It’s expected that this legislation will be in place as long as there is health emergency.

The insurance must cover hospitalization, rehabilitation, and death expenses after a confirmed COVID-19 diagnosis. Employers must purchase the COVID-19 insurance within ten days from the day employees are starting employment or moving to in-person operations.

The insurance policy is for 12 months initially and should be renewed if following that the COVID-19 health emergency is still in force. The insurance premium is paid as a one-off instalment for a maximum of UF 0.42 (plus VAT) per employee per year.

Employers who do not purchase this insurance face fines and may also be ordered to close their physical premises until they comply. In addition, employees who have been infected with COVID-19 can bring legal action for damages and compensation against employers that did not comply with the new obligations. In addition, employers will also have to pay anything that would have been covered under the COVID-19 policy.

Job Security in Chile

Unions

Employees have the right to join, not to join, or to leave a union whenever they wish. They cannot be forced to join a union to perform a job or to develop an activity. Their employment cannot be conditional on being members of a union. Employees cannot belong to more than one union for the same job.

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