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A Blog Post

Chile Stimulus Update: Employment Subsidy Plan

Written by Osvaldo Cabezas

Last week, the Chilean Government announced an “Employment Subsidy Plan”, worth USD $2 billion, with the goal of creating and recovering one million jobs that were lost due to the coronavirus pandemic.

The plan will operate based on two different subsidies: A “Hiring Subsidy” for new employees, and a “Re-Installment Subsidy” for employees whose employment was suspended due to Covid-19.

As reported by the President, this program will have a greater emphasis on SMEs, women, young workers, and individuals with a certified disability, as these are the groups who have been most affected by the pandemic.

The following benefits are to be granted:

Hiring Subsidy:

  • The government will grant an amount equivalent to 50% of the gross monthly remuneration with a limit of CLP$ 250,000 (approximately USD $320) per month, for each new employee hired.
  • In the case of female workers, young workers between the age of 18 and 24, and individuals with disabilities, the amount of the benefit will amount to 60% of the gross salary of each new hire, with a cap of CLP$ 270,000 (approximately USD $345) per month.
  • The benefit will be granted for the term of 6 months for each additional hiring made by a company.

This benefit will be available only for those employees whose monthly wage is less than CLP$961.000 (approximately USD$1,230). For this purpose, consider that minimum wage in Chile is CLP$320.000 (approximately USS$410).

Re-Installment Subsidy:

  • This benefit will grant CLP$160,000 (approximately USS$205) for each employee that is reinstated in their jobs, for a term of 6 months.

This benefit will be available only for those companies that have experienced a drop in sales or with a gross income of at least 20% within the period April-July 2020, compared to the same period of 2019.

In addition, the benefit will be available only for those employees whose monthly wage is less than CLP$961.000 (approximately USD$1,230).

HOW TO APPLY

Companies wishing to apply for the benefit must do so online through the website www.subsidioalempleo.cl, where they will be also able to check the status of the applications and review the subsidies received with their respective payment status.

The applications process starts on September 28, and the benefits will end on March 31st, 2021.

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Mexico, Peru, Ecuador, Brazil, and Argentina. Over the last 19 years, our team of English speaking Lawyers and Attorneys have been supporting foreign companies with their growth in Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets. 

To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at cmm@hgomezgroup.com