Chile is undergoing a political tectonic shift as its newly drafted constitution is to be put up for a referendum on September 4. However, it may not affect its economic climate.
Chile remains South America’s largest and most prosperous economy after Brazil & Argentina. The country recorded a Gross Domestic Product (GDP) worth 317.06 billion US dollars in 2021 and is expected to grow by 1.6% this year.
The country welcomes foreign businesses to expand their operations through investor-friendly policies such as establishing a company by shares and favorable trade agreements between several countries. Any global business looking to set up a local entity in Chile and hire local staff stands to benefit from this.
Employers with a locally registered entity or operating through an Employer Of Record (EOR) in Chile follow responsible hiring practices to avoid financial and legal liabilities. An employment background check is one of the prominent practices in responsible hiring.
Global companies and local employers looking to hire trustworthy talents often opt for a background check. Conducting a background search also ensures accountability among employees resulting in unhampered productivity.
Read further to learn how employers conduct an employment background check in Chile compliant with the local rules and regulations.
What is Employment Background Verification?
An employment background screening is a standard process verifying candidates’ or employees’ claims about their professional accomplishments, education, and work experience. Additionally, employers may verify some personal information concerning the demand of the job position.
Typical background checks on prospective candidates and current employees include:
- Education and past employment records
- Criminal records
- Credit/financial checks
- Health checks/medical screening
- Social media/internet search
- Fingerprinting
- Handwriting
- Union membership
- Political views
- Drug and alcohol testing
Companies usually hire an HR department to conduct a background check. Foreign companies can comply with local rules and regulations for employment background screening by partnering with SaaS-based EOR solutions like Multiplier.
Benefits of Background Checks in Chile
According to the Contracting Risk Index 2019 by MultiLatin, the risk of hiring job applicants in Latin America is still very high, more so due to the partial inability to adequately filter out undesirable applicants with a past criminal record. A thorough pre-employment background check may avoid job application discrepancies and improve the recruitment process.
Here is how conducting a background check in Chile benefits the company:
- Maintaining the standard of job applications
- A job posting with mandatory employment background screening significantly improves job applications’ quality.
- Employers in Chile requiring a pre-employment background check saw fewer application discrepancies.
- Remain free from financial or legal liabilities
- An employee screening is beneficial for higher-level positions in the company, as choosing the wrong person can lead to potential financial losses or other legal liabilities.
- Maintaining an accountable workforce
- The workplace remains productive as a pre-employment background check ensures that the new hire does not disrupt the workflow and adds value to the company.
- Practicing responsible hiring processes
- A criminal background check becomes crucial to maintain the safety & security of the workplace in specific sectors.
- Hiring the right candidate through background search first avoids company resource depletion.
- Decreased employee turnover
- Conducting pre-employment checks on potential candidates can decrease the risk of employee turnover.
- It negates the possibility of poor hiring decisions and substance abuse like absenteeism, staff turnover, and criminality.
Are Employment Background Checks Legal in Chile?
Yes, employers can legally conduct an employment background check in Chile on prospective candidates and current employees.
In general, the Chilean background check law permits employers with local entities, or those operating in Chile through an Employer of Record (EOR) like Multiplier, to check education and prior employment records.
However, in a pre-employment background check, the Chilean government imposes certain restrictions on which information can be verified—medical information and credit history.
Moreover, employers can not conduct background checks based on any status protected by the Chilean anti-discrimination statute, including inquiries for union membership or political affiliation.
Things to Know When Performing a Background Check in Chile
The following section overviews specific aspects of a pre-employment background check in Chile and whether they are allowed.
Criminal record
- A criminal background check is restrictive to hazardous industries and specific sectors like Financial Services, Healthcare, Education, or Legal Services.
- Employers outside the relevant sectors cannot verify criminal records as it is not necessary to the job description.
- In Chile, criminal records are available for actual convictions.
Credit report
- Employers are restricted from asking candidates about their credit reports for a background check.
- The restriction also extends to accessing any financial history of candidates.
Employment history
- Employers can verify a candidate’s work experience as part of the employment background check in Chile.
- Employers can verify references mentioned in the job application, the applicant’s title, and whether they are applicable for rehiring.
Education history
- One of the most common fraudulent information on an applicant’s resume is the educational qualifications.
- Employers can conduct a background check to verify all the academic qualifications in the candidate’s resume.
- This helps employers analyze whether the candidate can handle the responsibilities of their job description.
Medical history
- Employers cannot request pregnancy certificates, HIV checks, and genetic diagnoses in Chile.
- Employers must have written consent from the candidates to access other medical records.
- Employers may ask for medical certification of aptitude for jobs involving hazardous activities or industries, as per articles 185 and 186 of the Chile Labor Code.
Social life
- Accessing social media profiles is a popular trend in HR background checks, and is valid in Chile.
- An employer can access all public information on a candidate’s social media profile to understand their personality, views, behavioral traits, and more.
Information Essential for a Background Check in Chile
Here are some of the things employers are required to know before conducting a background check in Chile.
- Any employer in Chile must inform and seek prior consent from the candidate before conducting a background search.
- Employers can also conduct an immigration check for foreign employees to ensure the employee has the right to work legally in the country.
- Chile has robust privacy standards that prevent employers from accessing data unless the position explicitly warrants it.
- Chilean background check law prohibits companies from discriminating against applications based on political views, race, color, gender, religion, language, social origin, nationality, gender identity, sexual orientation, or union affiliation.
Process Involved in Background Checks in Chile
In the absence of any standard framework to conduct an employee screening, the employment background checks in Chile include anything from checking the official database to verifying the candidates’ claims and other informal inquiries via social media profiles.
Here are the recommended steps for employers to follow while conducting a background search in Chile:
Step 1: Seeking consent from the candidate
- The employers must inform and seek written permission from the candidate to conduct a background check.
- Upon approval, employers can begin pre-employment or employee screening.
Step 2: Gathering necessary documents
- Accumulate all the necessary documents to quicken the background screening process.
- You can ask applicants to share relevant and authentic documents.
Step 3: Performing a pre-employment background check
- Depending on the job role, the following different types of background screening are sufficient in themselves for practicing responsible hiring in Chile.
- Professional associations: In professions like law, accountancy, etc., the genuineness of the candidature is gauged by a valid membership in their professional association.
- Professional certifications: Claims of a professional credential—specific to an industry—may be verified through a visual inspection of hard copies of certificates or verifying with the institutions directly that issued them.
- Job references: This type of background check is the most common practice. Employers may simply follow up on the mentioned references in the candidate’s resume to verify the accuracy of claims about their previous roles and responsibilities.
- Ask around: This type of employment background screening is the most informal practice and is suitable when hiring c-suite executives. Such candidates are more likely to have occupied similar positions and be known in local business circles.
Step 4: Obtain a Police Clearance Certificate, if necessary
- Applicants shall apply for a Police Clearance Certificate (PCC) in person or online at the Civil Registry Office to obtain PCC.
- Employers can seek the PCC of any particular candidate through their notarized authorization to a third-party representative.
Industries and Situations That are Most Suitable for Background Checks in Chile
Organizations and employers in Chile may consider conducting background checks before hiring for entry-level positions or appointing c-suite executives.
Typically, criminal background checks in Chile are exceptional and limited to sensitive public positions in the financial, healthcare, education, or childcare sectors. Further, conducting a thorough employee background screening for dangerous & hazardous activities or industries is essential.
Employers may run a company background check in Chile on self-employed contractors, temporary staff, employees provided by temporary staff agencies, trainees, and volunteers.
How Does Multiplier Help With Background Checks?
Chile seems less restrictive as background check law is tested on parameters such as turnaround time to complete the screening process, complexity in collecting documents from applicants, digital availability of records, or data and privacy regulations.
Therefore, any business looking to hire reliable candidates with professional integrity is allowed to conduct background checks in Chile.
All employers are required to stay compliant with the local rules and regulations for the hiring procedure and team management like taking prior consent and asking for information relevant to the job description only, refraining from knowing credit/financial history, union membership, political views, or collecting drug and alcohol testing, fingerprinting or handwriting.
Chile requires foreign companies to register as local entities to hire and conduct employee screening. Alternatively, foreign companies can partner with Employer-Of-Record (EOR) firms to conduct background searches.
Multiplier is a PEO-EOR firm that offers employee management services closely adhering to local regulations in over 150+ countries, including Chile.
Multiplier provides the option to reduce legal risk and maintain compliance with the local laws revolving around hiring and managing employees. You may now contract a third-party agency to conduct employment background screening in Chile.