Sick Leave in Chile: What Employers Need to Know

Navigating employee absences due to illness can be a challenge for businesses operating in Chile. The country has a structured system that regulates sick leave and work absences, ensuring that employees’ rights are protected while maintaining compliance with labor laws. In addition, administrative leave is a practice that many companies adopt, but it is not legally mandated.

In this article, we break down the key regulations and best practices for managing sick leave and administrative days in Chile.

Work Absence Due to Illness in Chile: What Employers Need to Know

Chile’s Labor Code and health insurance system (Fonasa and Isapres) regulate sick leave. Below are the key aspects businesses should be aware of:

1. Right to Medical Leave

Employees who suffer from an illness or accident that prevents them from working are entitled to medical leave, which must be issued by a doctor and approved by the relevant health entity (Fonasa or Isapre).

2. Payment of Temporary Disability Allowance (SIL)

Instead of receiving their regular salary, employees on sick leave are entitled to a temporary disability allowance (subsidio por incapacidad laboral), provided they meet the required contribution conditions.

• The allowance is paid by Isapre, Fonasa, or a Compensation Fund (Caja de Compensación), depending on the employee’s health coverage.
• Payment begins on the fourth day of leave if the absence is less than 11 days, or from the first day if the leave is for 11 days or more.

3. Justification of Absences

Employers can only recognize sick leave if it is backed by an approved medical certificate. Absences without medical justification may result in:

• Salary deductions
• Disciplinary actions based on company policies

4. Can an Employee Be Dismissed for Absences?

Under Article 160 No. 4 of the Chilean Labor Code, an employer may dismiss a worker for unjustified absences if they accumulate:

• Two consecutive days of absence
• Two Mondays in a month
• Three total days of absence in a month

However, if absences are backed by an approved medical leave, dismissal is illegal.

5. Protection Against Dismissal While on Medical Leave

Workers cannot be dismissed while on sick leave, except for reasons unrelated to their health status, such as:

• Company restructuring (with prior court approval)
• Expiration of their employment contract

If a worker is wrongfully dismissed during medical leave, they can seek reinstatement or compensation through Chile’s Labor Inspection Office or labor courts.

6. Work Accidents and Occupational Diseases

Employees who miss work due to a workplace accident or occupational illness are covered under Law No. 16,744, administered by:

• Instituto de Seguridad Laboral (ISL)
• Asociación Chilena de Seguridad (ACHS)
• Mutual de Seguridad

These entities provide free medical care and financial compensation under the occupational accident and disease insurance scheme.

Administrative Leave in Chile: A Voluntary Practice, Not a Legal Right

Unlike medical leave, administrative leave (días administrativos) is not regulated under Chilean labor law. However, many companies offer it as an additional benefit.

1. What Are Administrative Days?

Administrative days are special leave days granted by an employer, allowing employees to take time off for personal reasons without affecting their salary or employment relationship.

2. Are Administrative Days a Legal Right?

No. Chilean labor law does not require employers to grant administrative days, but they can be included in:

• Employment contracts
• Collective agreements
• Company policies

3. How Many Administrative Days Can an Employee Request?

This depends on each employer’s policy. Some companies offer 1 to 3 administrative days per year, but there is no legal requirement to do so.

4. How Are They Requested?

Employees must request prior approval from their employer. Some companies may also require justification for the request.

5. How Do Administrative Days Compare to Other Leave Types?

Type of Leave	Regulated by Law?	Typical Duration	Requirements
Administrative Days	❌ No	Varies by company	Employer approval required
Marriage Leave	✅ Yes	5 days	Legally mandated
Bereavement Leave	✅ Yes	1 to 7 days	Depends on relationship to the deceased
Medical Leave	✅ Yes	As prescribed by a doctor	Must be approved by Isapre or Fonasa

Conclusion

For foreign companies operating in Chile, understanding how work absences are managed is critical since it can be quite different then other countries. It is crucial for companies to ensure legal compliance, avoid potential penalties, and effectively manage workforce productivity. Chile has specific regulations regarding sick leave, vacation time, parental leave, and other types of absences, which must be followed to prevent legal issues. By having a clear understanding of these laws, companies can better manage their resources, plan for workforce shortages, and implement fair and consistent policies. 

For companies operating in Chile, Peru, and Brazil, understanding local labor regulations is crucial to ensuring smooth operations and compliance. If your company needs guidance on employment law, labor disputes, or workforce management, Ax Legal can help.

Ax Legal helps industrial technology, engineering, and service companies to navigate the legal and commercial aspects of operating their business in Latin America. With deep knowledge of the industrial and natural resource sectors, we provide actionable and practical advice to help streamline our clients’ entries into Latin America, improve how they operate in the region, and to protect their interests.

Over the years, our team of legal and commercial advisors have developed a track record of working with companies of all sizes from Australia, Canada, the U.S., and Europe. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal