How to stay compliant

Employer-of-Record (EOR) in Chile: Do You Need One?

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How to stay compliant

Employer-of-Record (EOR) in Chile: Do You Need One?

So you want to hire someone in Chile. Problem is, your company is located somewhere else.  

If you’ve done some research, you’ve probably been told you should be using an Employer-of-Record (EOR). Why? Well, if your company isn’t located in Chile, using an EOR can help you bypass the traditional obstacles to hiring full-time employees.  

But there’s a catch: EOR solutions in Chile are expensive—usually at least $500 per month per employee—and can take time to set up. And because you’re complying with a different set of labor laws, logistics and benefits can end up costing you lots of time and money. While they will save you time from setting up your own entity, they’re rarely cheap or fast.

The good news? There’s another way to hire remote workers in Chile, and it doesn’t involve forking out huge amounts of money for an EOR.  

The solution: Hire your teammates in Chile as contractors. If you’re hiring remotely and your teammates have autonomy, there’s a good chance you can make compliant contractor hires. You still have to use locally-compliant contracts, but the process is a lot easier, more affordable, and faster.

We built Thera to help you make contractor hires, in 150+ countries (like Chile). So you can hire the people you want on your team, without paying thousands for an EOR. You can get set up in a couple of clicks—and you’ll only pay $49 per contractor per month.  

It’s just as easy as it sounds. No catch. Here’s what Thera looks like vs. an EOR in Chile:

Everything you should know about using an EOR in Chile

Are you a business owner or manager considering hiring independent contractors abroad? If you're looking to expand your business into Chile, you may be wondering what your options are for hiring local talent. One option is to use an Employer of Record (EOR) service. In this post, we'll break down what an EOR is, how it works in Chile, and the legal and regulatory conditions you need to be aware of. We'll also explore why hiring independent contractors might be a better option for your business.

What is an EOR?

An EOR is a third-party service provider that acts as the legal employer of your workers in a foreign country. This means that the EOR takes care of all the administrative tasks associated with hiring and managing employees, such as payroll, taxes, benefits, and compliance with local labor laws. As the client, you retain control over the day-to-day work of your employees, while the EOR handles the legal and administrative aspects of employment.

How do EORs work in Chile?

In Chile, EOR services are regulated by the Labor Code and the Social Security Code. To use an EOR, you must sign a service agreement with the provider, which outlines the terms and conditions of the arrangement. The EOR will then hire your employees on your behalf and take care of all the legal and administrative requirements of employment. You will pay the EOR a fee for their services, which will include the employee's salary, taxes, and other benefits.

Legal and regulatory conditions

One of the main advantages of using an EOR in Chile is that it can help you comply with the country's complex labor laws and regulations. For example, Chile has strict rules regarding working hours, overtime, and vacation time, which can be difficult for foreign businesses to navigate on their own. By using an EOR, you can ensure that your employees are treated fairly and that you are in compliance with all local laws and regulations.

Why you might want to hire contractors instead

However, it's important to note that using an EOR in Chile may not be the best option for every business. Independent contractors are not considered employees under Chilean law, which means that you do not need to provide them with the same benefits you’d need to provide employees. However, you will need to ensure that you have a clear contract in place that outlines the terms of the engagement. Thera can help you draft a contractor agreement in Chile.

What if I accidentally misclassify my contractors?

We’ve got two pieces of good news for you. For one, if you’re hiring remotely, it’s unlikely you’ll misclassify your contractors. Many of the things that qualify people as employees, such as company equipment and set working hours, don’t typically apply to remote work.

Still, it’s helpful to have the comfort of knowing you’re not at risk for misclassification. That’s why, at Thera, we’ve launched Misclassification Assurance: so you can hire contractors abroad, worry-free. Learn more about hiring with Thera below.

Hiring contractors? Thera can save you a ton of time

If you’re hiring contractors, you’re probably spending too much time on their payroll, contracts, and tax documents. Which is why we built Thera, which saves you 90% the time you spend on contractor paperwork each month.

With Thera, you can compliantly hire your contractors in 150+ countries, onboard them in minutes, and pay them all at once (in a click). It’s global contractor payroll, finally simplified.

Sound interesting? Click here to book a demo and see the platform firsthand

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