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Labour Law

Social security payments and related benefits

Most of the social security payments in Chile are burden by the employee. The employer’s obligation is to deduct that payment from the gross salary.

If the employer fails to do so, he can be liable for the payment and this evasion can be considered a felony.

 Workers in Chile have to pay health insurance and provisions for a retirement pension. They give 7% of their gross income to health insurance and about 12.5% to provisions for a retirement pension.  Health insurance does not only cover medical treatment but also medical leave. If people are sick, the 3 first days are not paid by the health insurance nor by the employer.

Foreign workers are allowed to withdraw the money they paid as provisions for a retirement pension when they leave the country.

Additionally, there is the unemployment insurance that is paid partly by the employer (2.4%) and partly by the employee (0.6%). Part of this money goes to an employee’s private account and the other part to a common solidarity account. To be eligible to receive money from the solidarity account they must fulfill some rules, like registering themselves in a public work center.

The direct cost of the company is to work accidents’ insurance. Usually, the cost is 0.95% of the employee’s salary. This amount may rise if the company has accidents. This payment also entitles de company to receive free of charge advice about health and security at the work place from entities that are in charge of the administration of this insurance.

All these social security payments are done online through a website called www.previred.cl

Employees are entitled to receive part of the benefits of the company. The employer has the right to choose between two systems: either the company shares 30% of the company’s profit among the workers or the company pays them a fixed amount of 25% of their income with a limit of 4.75 minimum wages (that is about U$120 monthly).

Last modified: 16/04/2020

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