By Globalization PartnersSeptember 2013
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This month at the Globalization Partners water cooler, we are kicking around the idea of a Latin American vacation, as you might be able to tell from our content offerings. A few hints to consider when hiring in Chile:
- When extending an offer letter to a Chilean candidate, carefully state whether your offer is a gross or net annual salary. In Chile, it is common practice to negotiate salaries in NET monthly terms and your candidate is likely to interpret your office as a NET salary payment rather than gross unless carefully stated otherwise. Dios mios!
- When budgeting for payroll in Chile, assume that most social security costs are withheld from the employee rather than paid by the employer. Labor costs are quite reasonable for employers in Chile.
- There is a requisite 13th month salary for all Chilean employees. If the offer letter states a monthly salary, be aware that a candidate is likely to calculate the annualized offer as 13x the monthly salary rather than multiplying by 12.
- The total employee benefit cost is very low in Chile, ranging from 2.5% to 10.5% for a comprehensive package. Clients that pay an employee $100,000 USD per year (including the mandatory 13th month salary) typically end up paying $102,500 to $110,500 USD in total costs for social insurance.
- Per most employment contracts in Chile, employers are expected to provide life insurance that would covers 2 years worth of salary.
- Employees with more than 1 year of service have a right to 15 paid working days per year. Ten days must be taken consecutively, and the remaining 5 as agreed by the employee and employer. Vacation time can be accrued for up to 2 consecutive years.
The best tip we can give you, whether you need to hire in Chile, or any other country? When hiring overseas, it pays to do your homework – or have someone do it for you. We break the mold by making international expansion easy for our clients. After all, we are the future of your business, streamlined.