Using The Services Of The Professional Employer Organization In Chile

Get To Know How To Use The Services Of Professional Employer Organization In Chile

The Professional Employer Organization (PEO) in Chile is a company that legally hires workers especially for companies that has just started, or those which are not well known in a given country. Also known as “employee of record”, the Professional Employer Organization in Chile manages and oversees all human resource related functions. They also share various employer responsibilities such as handling the employee benefits, regulatory compliance, and payroll outsourcing.

Using a Professional Employer Organization in Chile will ensure that the company is on top of the local laws and regulations therefore minimizing the risk of violating them. If you’re a foreign individual starting a new business in Chile, there’s no one who can help you better other than the locals themselves. Employees will be hired quickly in compliance with various Chilean labour laws, and you will be able to get HR support without actually increasing the number of your employees. Tasks such as administrative HR tasks will also be reduced, as well as having little to no worries on establishing and maintaining a local Chilean entity.

As mentioned earlier, the Professional Employer Organization in Chile will be the one responsible for hiring employees. They are also the one responsible in making sure that no Chilean Labour Law will be violated throughout the whole employment of an individual, starting from the hiring process until their last day. Some of the important points in the Chilean labour law are:

1. Employment Contracts – must be in writing and completed within 15 days from the initiation of services;
2. Fixed-term Contracts – can be made for a maximum duration of one year for a regular employee, two years for managers or those that have professional or technical degree delivered by a state-recognized institution;
3. Foreign workers – must only make up 15% of the company, 85% must be Chilean workers;
4. Committees – a joint health and safety committee to identify and assess the risks of accidents and occupational diseases, and a bipartite training committee to promote the training of employees in the company;
5. Unions – employees have the right to unionize and form labour unions to represent themselves before the company
6. Termination – must be a written communication informing about the contract termination, one month in advance, unless employee is paid a compensation equivalent to 30 days of work.

The Professional Employer Organization in Chile is also the one who is responsible in making sure that all employees will receive these employee benefits:

1. A maximum working schedule of 45 hours per week. The 45 hours can be distributed in a minimum of 5 days and a maximum of 6 days. An ordinary work day cannot exceed 10 regular hours and can only work for two hours of overtime. However, employees with the power to manage and employees without direct supervision are excluded in this limit.
2. Employees that are not exempted from the working hours’ limit are entitled to overtime pay, which is calculated as one-and-a-half times of the ordinary salary.
3. Annual holiday consisting of 15 working days which will increase by one day for every three years of employment with the same employer, or for 10 years of work for more than one different employer.
4. Sick leave with no annual limit as it is completely dependent on the medical license extended by the doctor. Employee will receive an amount equivalent to his or her salary, paid by the respective health institution.
5. Paid maternity leave starting 6 weeks prior to birth of the child, to 12 weeks following the birth.
6. No probationary period as it is not included in the Labour Code.

It is the Professional Employer Organization in Chile’s responsibility to ensure that all the companies they will handle are fully aware and completely compliant to the Chilean Labour Code, while at the same time, taking care of all risk mitigation, payroll, and employee benefits.