Sick Leave in Chile: Licencia Médica and Subsidy Rules for Employers

Chile’s sick leave law provides employees with a subsidy from the Social Security Institute (ISL, formerly IPS) after a 3-day waiting period. The employer pays salary for the first 3 days at the normal rate, and the ISL pays a subsidy at 70% of the assessment basis from day 4. The system is governed by the Labour Code and the Social Security Law.

Key Takeaways

• Employers pay 100% of salary for the first 3 days of illness
• ISL pays a subsidy at 70% of the assessment basis from day 4
• A licencia médica (medical certificate) is required from day 1
• For workplace accidents, the rate is 100% from day 1
• The maximum subsidy period is 520 days within a 3-year window

Chile’s Sick Leave Entitlement

Chile’s sick leave system operates under the Labour Code (Código del Trabajo) and the Social Security Law. When an employee falls ill, the employer pays salary for the first 3 calendar days. From day 4, the employee applies for a subsidy from ISL (Instituto de Seguridad Laboral).

The licencia médica (medical certificate) is issued by a doctor and must be presented to both the employer and ISL. The licencia specifies the expected duration of the absence and whether the employee can leave home.

Who Pays for Sick Leave?

Period	Pay Rate	Who Pays
Days 1–3	100% of salary	Employer
Days 4+	70% of assessment basis	ISL

Sick Leave Pay Rates

Period	Pay Rate	Source
Employer period (days 1–3)	100% of salary	Labour Code Art. 168
ISL subsidy (day 4+)	70% of assessment basis	Social Security Law
Workplace accident	100% from day 1	Labour Code Art. 168
Maximum subsidy period	520 days within 3 years	Social Security Law

The assessment basis is the employee’s average monthly salary from the 6 months before the illness. The subsidy is subject to a ceiling set by ISL.

Medical Certificate Requirements

Chile requires a licencia médica from the first day of illness. The licencia must include:

• The date of the consultation
• The expected duration of the absence
• Whether the employee can leave home (descanso domiciliario or hospitalización)
• The doctor’s RUT and signature

The employer must forward the licencia to ISL within the prescribed timeframe to avoid losing the subsidy.

How to Calculate Sick Pay in Chile

Example: An employee earning CLP 800,000/month is off sick for 30 calendar days.

1. Employer period (days 1–3): CLP 800,000
2. ISL subsidy (days 4–30): 27 days
3. Daily ISL subsidy: CLP 800,000 × 0.70 ÷ 30 = CLP 18,667/day
4. ISL payment: CLP 18,667 × 27 = CLP 504,000

Total paid to employee: CLP 800,000 (employer) + CLP 504,000 (ISL) = CLP 1,304,000

The Licencia Médica System

Chile’s licencia médica system is distinctive:

• The doctor issues the licencia directly to the employer and ISL
• The employer must forward the licencia to ISL within 3 working days
• If the employer fails to forward the licencia, the employee loses the subsidy for those days
• The licencia can be extended by the doctor if the illness continues

This is a common area of dispute — employers who fail to forward the licencia on time can be held liable for the lost subsidy.

Employer Obligations and Penalties

Chilean employers must:

• Pay salary for the first 3 calendar days
• Forward the licencia médica to ISL within 3 working days
• Maintain records for at least 6 years
• Cooperate with ISL’s medical assessment
• Report workplace accidents to ISL immediately

Non-compliance can result in fines from the Labour Directorate (Dirección del Trabajo) and liability for incorrectly forwarded or unforwarded licencias.

Comparison With Other Countries

Country	Sick Days	Pay	Certificate Required
Chile	3 days employer + ISL subsidy	100% / 70%	Day 1 (licencia médica)
UK	28 weeks SSP	£116.75/week	Day 7
Australia	10 days personal/carer’s leave	Full rate	2+ consecutive days
US	Varies by state	Varies	Employer policy

FAQ

What happens if the employer fails to forward the licencia médica?

If the employer fails to forward the licencia médica to ISL within 3 working days, the employee may lose the subsidy for the affected period. The employer may be held liable for the lost subsidy. This is a strict obligation with no excuse for late forwarding.

Can the licencia médica be extended?

Yes, the doctor can extend the licencia if the employee’s condition requires continued rest. The extension follows the same rules as the original licencia — it must be issued by a registered doctor and forwarded to ISL by the employer.

What is the difference between the employer period and the ISL subsidy?

The employer period (days 1–3) is paid at 100% of salary by the employer. The ISL subsidy (day 4+) is paid at 70% of the assessment basis by ISL. The gap between the two rates represents a reduction in income for the employee during extended illness.