As one of the strongest economies in Latin America, Chile has built a solid workforce of tech professionals who compete favorably against experts in other regions. With a workforce of over 60,000 IT professionals, Chile has the fifth most significant number of tech experts on the continent. Additionally, all of its professionals are adept English speakers. Chile has a long history of sharing its tech talent with other parts of the world. As a result, the IT outsourcing market in the region is projected to reach a value of 1 billion dollars by 2029. And that’s why many US tech companies try to hire remote employees from this country to supplement their workforce. 

While it sounds like a great idea to hire remote employees from Chile, there’s a lot you should know about the country’s labor laws and how they affect foreign employers. Failure to pay attention to local labor laws related to remote hiring can lead to sanctions and fines that may make it difficult to achieve desired results. 

The Feasibility of Remote Hiring in Chile

Before hiring remote workers in Chile, learning about local labor laws makes sense to ensure the process goes as smoothly as possible. Employment in Chile involves three types of contractual agreements – individual, collective, and special. Individual contracts represent an agreement between an employer and employee, which can be permanent or temporary. Collective contracts set general employment terms for employees, while special contracts are for unique working relationships like apprenticeships. According to Article 10 of the Chilean Labor Code, contractual agreements in Chile should contain the following: 

  • Contract date and place
  • Identification of parties involved in the agreement
  • Detailed job description 
  • Pay terms

Working Hours and Overtime in Chile

Chile recently adopted a 44-hour work week, the first phase of its plan to reduce the maximum working hours per week to 40. Working days are typically spread between five or six days. In 2026, working hours per week will be set at 42 hours, while there will be a final decrease to 40 hours in 2028. 

Chilean remote workers can work up to two hours of overtime per day and a maximum of 10 hours per week. Overtime hours are paid at 50 higher than the regular rate. 

Minimum Wage

If you wish to hire a remote employee in Chile, be prepared to pay the minimum wage offered to full-time workers. The minimum wage for full-time workers currently stands at 460,000 CLP. Chilean labor law has outlined plans to increase this amount to 500,000 CLP by July 1, 2024. However, it’s crucial to note that these regulations do not make provisions for 13-month salary payments. 

Leave Entitlements

Chilean labor laws emphasize a work-life balance, so employees are offered several leave entitlements. If you hire a remote worker in Chile, be prepared to provide them with annual leave, maternity and paternity leave, sick leave, and public holidays. 

Legal Working Age

Foreign companies can employ any individual in Chile if they are 18 or older. However, teenagers between 15 – 18 years can apply for remote jobs with their parents’ permission. Teenagers and young adults must continue their education while they work. You may have to consider this detail when setting working hours. 

Probation

If you want to hire a remote worker, remember that no law specifies the duration of the probation period. Most companies employ workers for a short period to monitor their performance. During the specified probation period, employers can terminate the employee’s performance with cause. After the probation period, the contractual terms become fixed. 

Fixed-Term Agreements

The maximum duration of a fixed-term agreement is 12 months. However, it can be extended to 24 months if the employee holds a technical position or has a professional qualification granted by an educational institution in Chile. Employees who have worked for 12 months are entitled to 15 days of paid leave. Employees with more than ten years of service will receive an additional paid day off for every three years of service. 

Employer Contribution

To support a work-life balance, Chilean labor law stipulates that employers make specific contributions to pay for social security. The following list shows the breakdown of employer contributions to social security payments: 

  • Unemployment Contribution: 2.4%
  • Occupational Contribution: 0.95%

Read more: Work Hours in Chile

What Do You Need To Hire Remote Employees in Chile?

If it’s your first time hiring in Chile, you must prepare these documents to complete the process. They include: 

  • Registration: Before foreign companies can hire in Chile, they must register their brand with the Registro Publico de Comercio and Servicio de Impuestos Internos. It also makes sense to apply for your tax ID. 
  • Documentation: Company documents such as statutes, by-laws, memorandum of association, incorporation, and other business and legal papers must be notarized and translated into Spanish. 
  • Bank Account: To pay salaries, you must apply to create a bank account. However, you may need to submit any of the documents mentioned above. 
  • Permanent Address: Hiring businesses must also have a registered permanent address for your office in Chile. 
  • Municipal License: Hiring businesses also needs a patent municipal license suitable for your business structure. 
  • Insurance: Before recruiting any employee in Chile, you must register them for staff accident insurance coverage. 
Looking for Remote Hiring Assistance?

Let Globy simplify your remote hiring in Chile, guaranteeing both compliance and efficiency.

Setting the Stage for Remote Employment in Chile

If you wish to hire remote employees in Chile, you can choose either of two alternatives. You may set up your legal entity, which allows you to perform legal processes such as payroll and registering employees for benefits, or partner with an Employer of Record who will serve as your legal entity. While both alternatives can help achieve the same result, their approach is different. 

While setting up your legal entity may seem obvious, many foreign startups and medium enterprises need more resources to complete this lengthy process. Hence, they prefer to partner with an EOR at a monthly fee. EORs take plenty of burden off your shoulders, and business owners can focus on the most crucial aspects of their organizations. 

If you’re inexperienced hiring tech experts remotely from Chile, you may get overwhelmed by the abundance of talent in the region. That’s where a hiring agency comes in. The best hiring agencies will connect you with the right type of professional to carry out your tasks satisfactorily. All you need to do is let them know about the professional you’re looking for, and they’ll provide you with a shortlist of options, each with their strengths and weaknesses. After choosing your preferred candidate, they’ll help you onboard, train, and equip your remote employees. 

Globy is a reliable global hiring agency poised to offer you top-notch remote hiring services in Chile. Their job is to connect you with the best talent in the region. All you have to do is let them know the position and skill level you’re interested in hiring, and they’ll sift through their talent pool to match you with the best alternatives based on your organizational structure and budget. If you don’t have a legal entity, they can also connect you with a network of EORs. Furthermore, they will help you handle payroll, tax reporting, and employee benefit registration. 

Read more: Payroll Taxes & Expenses in Chile

Understanding the Contractor vs. Employee Dynamic

Chilean labor law makes a clear distinction between employees and contractors. If you want to hire remote employees in this country, you can differentiate between both categories of workers. 

ContractorsEmployees
AutonomyAn independent contractor has the freedom to handle their work whenever they want and however they want it. They also get little or no supervision from employers. Employees operate under the direct supervision of employees and need directives to guide their actions and operations. Employers also make decisions on behalf of their employees. 
Equipment An independent contractor is responsible for providing the equipment that they’ll use to perform their operations. 
Employees’ equipment is provided by their employers. They may also receive training on how to use the organization’s preferred tools. 
IntegrationDespite having contractual agreements, independent contractors are not a part of your business. They can operate on their own working hours and are not obligated to attend any meetings. Employees are a crucial part of your business structure. They are obligated to work on company property during predetermined working hours and must attend all meetings. M
BenefitsChilean independent contractors must settle benefits, such as pension and social security protection, themselves. Employers are not obligated to provide them any benefits. 
Chile’s labor code stipulates that employees are entitled to several benefits, including social security, health insurance, parental leave, paid annual leave, termination notice, overtime, and health insurance. Employers are responsible for paying for these contributions on behalf of their workers.
Level of EngagementThis type of working relationship only exists for a fixed period of time which is usually specified in the agreement. This type of working arrangement is indefinite and unspecified but can be terminated by either party at any time.  
Personal LiabilityIndependent contractors are going to assume risk and liability for their work. Employees are protected from any work-related losses which are borne by the employer.
Responsibility Independent contractors are allowed to turn down any work or responsibilities that were not specified in the contractual agreement. Employees are not allowed to turn down any work assigned by a supervisor. However, certain exceptions may be stipulated in the contract, especially if it inhibits the employee’s work-life balance. 

Read more: Independent Contractors in Chile

Financial Planning for Your Remote Employees in Chile

When hiring a remote team in Chile, finding out how much it’ll cost is essential. As mentioned earlier, employer obligations for employees differ from those of independent contractors. Aside from monthly salary parents, Chilean labor laws stipulate that companies must share 30% of their taxable income with employees based on the current payroll structure. If you offer employees additional benefits like gym memberships, transport allowance, and meal vouchers, consider the extra costs for the business. 

Navigating Compliance and Legal Risks When Hiring Remotely in Chile

As mentioned earlier, avoiding misclassifying independent contractors and employees is crucial. If you fail to classify your remote workers as employers or independent contractors correctly, you’ll be charged a misclassification fine ranging between 4,227,360 CLP and 26,421,000 CLP. However, this fine may result in an additional charge of 1,585,260 CLP per miscategorized employee. An EOR is a great idea to help foreign employers correctly classify their remote workers. 

Streamlining Remote Hiring in Chile

Due to Chile’s complicated labor laws, remote hiring in Chile is relatively tricky, especially if you must set up your industry operations from scratch. However, you can streamline the remote hiring process by partnering with a recruitment agency. 

Globy is a global hiring agency that will simplify your organization’s hiring process. By leveraging our long list of shortlisted candidates, you can rest assured that you’ll work with the country’s best remote talent. They’ll also help you onboard and train employees to adapt to your business structure. Globy also has a network of EORs that help you handle different legal processes, including payroll and tax reporting.

Ready to Simplify Hiring in Chile?

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Read more: Employer of Record in Chile

FAQs

Remote hiring in Chile allows access to a diverse talent pool, reduces overhead costs associated with physical offices, and provides flexibility for employers and employees. It also enables companies to tap into the country’s growing tech talent without geographical limitations, enhancing productivity and innovation.

To ensure legal compliance when hiring remote workers in Chile, familiarize yourself with local labor laws, including tax obligations and employment contracts. Consider partnering with a local Employer of Record (EOR) or a legal advisor to navigate complex regulations and meet all legal requirements.

Practical tools for managing remote teams in Chile include project management software like Asana and Trello, communication platforms like Slack and Microsoft Teams, and video conferencing tools like Zoom. These tools facilitate collaboration, task tracking, and communication, ensuring smooth operations despite geographical distances.

To find qualified remote software developers in Chile, use online platforms like LinkedIn and GitHub and specialized job boards like GetonBoard and Computrabajo. Networking through local tech communities, attending virtual tech events, and leveraging recruitment agencies can help you connect with top talent. You may also leverage hiring providers, such as Globy, to connect you with the best talent in the region.

Common challenges of remote hiring in Chile include time zone differences, communication barriers, and cultural differences. Overcome these by establishing clear communication protocols, using collaboration tools, scheduling overlapping working hours, and fostering an inclusive company culture that values diversity and remote work practices.

Author avatar
Article author
Vit Koval
Co-founder at Globy
A top Global Hiring voice on LinkedIn, co-founder of Globy, and host of Default Global. Using deep expertise in global hiring, remote work, and global business expansion to help companies excel worldwide with innovative strategies.