Background information on applicants

Background checks

Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

In general, the law does not consider restrictions or prohibitions against background checks. Information regarding applicants could be obtained from applicants without statutory restrictions. Notwithstanding, companies should avoid questions, tests or searches that could be considered discriminatory.

It is expressly prohibited to require certificates or declarations regarding an applicant’s credit and financial background.

Medical examinations

Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

Pre-employment examinations are permitted under Chilean law, with the exception of HIV testing (Law No. 19,779, article 7), pregnancy testing (Labour Code, article 194) and genetic diagnosis (Law No. 20,120, article 4). Knowledge of the results of the testing by the employer would require express written consent by the candidate.

Articles 185 and 186 of the Labour Code state that a medical certification of aptitude must be required prior to working in dangerous or hazardous activities or industries.

Although there are no specific provisions in the law, an employer has the option of not hiring an applicant who does not submit to an examination when compatible health conditions are required for performing a particular job.

Drug and alcohol testing

Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

Drug, alcohol and tobacco tests are not prohibited under Chilean legislation. However, the consumption of illegal drugs cannot be the sole reason for refusing to hire an applicant. The decision to not hire someone must be based exclusively on the fact that the consumption affects his or her employment capacity or personal fitness. Also, a fundamental consideration would be whether such consumption increases the risk of accidents in certain work activities. In addition, past drug consumption cannot be taken as the basis to discriminate against a rehabilitated person. Any information obtained must be treated in a strictly confidential manner.

Hiring of employees

Preference and discrimination

Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

There are no statutory requirements regarding this matter.

Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

The employment contract must be in writing and executed within 15 days of the initiation of services. This term is reduced to five days when the contract duration is less than 30 days or if it is not specifically mentioned in the contract and it is exclusively determined by the specific work for which the employee was hired (typically in construction). Article 9 of the Labour Code states that if the labour contract is not put in writing within the aforementioned 15-day period, the terms and conditions thereof shall be those indicated by the employee. Additionally, the employer shall bear the burden of proof of the real conditions and terms agreed on.

The labour contract must contain the following clauses:

  • place and date of contract;
  • individualisation of the parties, indicating nationality, birth date and the date the worker begins employment;
  • nature of services to be provided and place or city where they are to be rendered. The contract may indicate two or more specific services that may be alternate or complementary;
  • amount, form and payment period of the remuneration agreed to;
  • duration and distribution of work schedule, except if the company has a work system based on shifts, in which case internal regulations must be observed; and
  • term of the contract.

The parties may include other clauses they may agree upon in the labour contract; for example, voluntary benefits.

To what extent are fixed-term employment contracts permissible?

Fixed-term contracts can be made for a maximum duration of one year. In the case of managers or individuals that have obtained a professional or technical degree granted by a state-recognised institution, the maximum duration is two years. The continued performance of services after this period turns the contract into one of indefinite duration. A second extension of a fixed-term employment contract produces the same effect.

Probationary period

What is the maximum probationary period permitted by law?

In general, the Labour Code does not consider a probationary period. The only exception is a two-week term provided for domestic workers. During this time, the employment contract may terminate at the will of either party, with a notice of three days in advance, paying the employer the time served. Regarding other employees, Chilean companies usually use fixed-term agreements as a de facto probationary period (first employment contract term is set for a couple of months), and if the employee fits in the position the labour agreement is renewed, or the employee can sign an indefinite (permanent) contract, otherwise the employee is dismissed at the initial term’s completion. This ‘probationary period’ could be extended at the discretion of the employer, for the maximum periods indicated in question 11.

Classification as contractor or employee

What are the primary factors that distinguish an independent contractor from an employee?

This distinction is made based on the characteristics of the services rendered. The employer-employee relationship exists when it qualifies as subordination or dependency between the parties. On the other hand, when the services are performed without such subordination or dependency, the individual is considered an independent contractor.

Temporary agency staffing

Is there any legislation governing temporary staffing through recruitment agencies?

As a general rule under Chilean labour law, employees should be directly hired by the employer to which they render services. Therefore, the scheme of employees provided by an external company is exceptional and needs to be duly justified based exclusively on legal causes, and for limited periods of time. Temporary personnel may be supplied by specialised companies called transitory services companies (ESTs) when the user company is under one of the following circumstances, indicated in article 183-Ñ of the Labour Code:

  • suspension of the labour contract or suspension of the rendered services, as a consequence of sick leave, maternity leave or holidays;
  • extraordinary events, such as the organisation of congresses, conferences, fairs, expositions or others of similar nature;
  • new and specific projects of the user company, such as the construction of new facilities, expansion of the facilities or expansion to new markets;
  • initial period of activities at new companies;
  • occasional or extraordinary increase, either regular or not, of the activity on a determined section or establishment of the user company; and
  • urgent and specific works, which require an immediate execution, such as facility repairs of the user company.

These ESTs must appear enrolled in a special registry of the Labour Authority, and have to pay a monetary deposit as guarantee. There are certain cases where the provisory supply of personnel is not allowed: to fill managerial, sub-managerial, agent or representative job positions; and to replace regular employees during a strike.