Outsourcing in Chile is allowed but is subject to many regulations. The Chilean law for contractors and subcontractors, that amended the Labor Code, sets forth a number of principles to secure the contractors and subcontractors employee’s rights.
There are two main aspects to be considered: one is the fulfillment contractors’ and subcontractors’ duty to pay their employees salaries and social security and the other is to make sure by the contractors, subcontractors and also the owner of the site, the so-called Principal, that the site is a safe workplace for the employees.
The law prescribes that a regulation will lay down all the specific requirements that the owner of the site should fulfill.
The law provides that the contractor’s employees the right to sue either his own employer or the owner of the site or both at his own choice for unpaid salary and holidays as well as compensation for dismissal. In accordance to the law, to avoid joint and other liabilities, the owner of the site shall ask the contractor for a form, given by the Labor Direction, that states that all legal obligations related to its employees are paid.