Hiring an independent contractor in Chile can give you access to professionals with diverse skill sets ready to support your project requirements. However, when you look for independent contractors to handle jobs for your company, you must apply the right strategy to successfully hire these skilled professionals.
Hiring independent contractors in Chile
If hiring a contractor is the best fit for your business requirements, you must understand how to classify different employment types.
Independent contractor vs. full-time employees
The primary distinction between independent contractors and employees is that contractors are officially self-employed. Legally, they are their own business entity providing a service for your company rather than becoming a subordinate member of your company. This designation usually precludes them from receiving benefits like health insurance and paid time off.
Penalties for misclassification
You should review labor laws in Chile to ensure you correctly classify your independent contractors as you prepare to hire. Compliance is ultimately the responsibility of your company, and you will need a government-issued certification to transfer that obligation to contractors. If you misidentify an employee, you could be liable for labor court fines and other penalties such as back payments for benefits owed.
How to hire independent contractors in Chile
When you need independent contractors to work for your company, follow these three guidelines to ensure the hiring process is successful.
1. Carefully conduct interviews
Interviews with full-time employees often involve questions about character traits because these individuals will contribute o company culture. Independent contractor interviews are more similar to business transactions. Focus your questions on skills and experience that can contribute to the project, as interest in personality traits may indicate a more permanent relationship.
2. Create a service agreement
Once you’ve selected a contractor, ensure both parties know what to expect from the business relationship. Create a written agreement that covers everything you and your contractor will provide, including:
- Pay rates and arrangements
- Contractor services provided
- Contract duration
- Termination conditions
Under labor regulations in Chile, you are also responsible for meeting health and safety requirements and managing workplace risk.
3. Introduce necessities
Extensive training can signify employer control over project completion, but you may offer a brief introduction to your company for your contractors to ensure they have everything they need to meet performance standards. Introduce them to key players in the project, company tools they may use, and essential workflows.
How to pay independent contractors in Chile
Because contractors are not on your employee payroll, you will need to provide remuneration through a separate process. If needed, use a trustworthy money transfer service to securely send funds internationally.
Your obligations for withholding tax contributions and providing benefits may depend on the situation. While responsibility for compliance falls on your company by default, you can opt to make your contractor responsible for their own labor and social security requirements with the proper certifications. Discuss these requirements with contractors before you sign your service agreement.
Terminating independent contractors
Standard practice is to structure a contract based on a turnkey lump sum. While the type of project can affect the agreement terms, you will generally have straightforward termination at the end of a set duration or project. To ensure both parties are satisfied with your terms, outline your termination protocols in the contract. This practice can help protect your business from potential legal issues in the future.
Turn to Globalization Partners when hiring independent contractors in Chile
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere, for both short- and long-term projects. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.