Guide to Brazil Employment Law
As your trusted PEO and Employer of Record partner in Brazil, WIDE Brazil is dedicated to providing you with comprehensive insights into Brazilian employment law to facilitate smooth operations and ensure legal compliance.
Understanding and adhering to these guidelines is crucial for maintaining a productive and harmonious work environment in Brazil.
In Brazil, all the laws and regulations regarding labor and employment are aggregated into the Consolidation of Labor Laws (Consolidação das Leis do Trabalho, CLT).
The CLT was last updated in 2017 through Law N. 13467 in 2017. Following this amendment, employers benefit from more flexible obligations. Some of the most important modifications regard employee workload, potential lawsuits, rest, meal, and vacation time.
1.
Payroll Contributions
Payroll Cycles
Payroll cycles occur monthly, typically with payments made on the last working day of the month.
Standard Working Hours
Standard working hours in Brazil are 44 hours per week, distributed as 8 hours per day from Monday to Friday.
Overtime
Work beyond 44 hours weekly qualifies for overtime. Up to 2 hours daily is overtime, paid at 150.00% standard salary. Holidays incur up to 200.00% of regular pay.
Probation Period
The employee probation period is 90 days, enabling assessment of compatibility and suitability before a long-term commitment.
2.
Mandatory Benefits
Transportation Allowance with potential deductions of up to 6% is available. Childcare Allowance is 20% of the normative salary for children aged 0 to 60 months post-maternity leave. Daycare Refund is 20% of the normative floor (BRL 274.59 or 20% on BRL 1,372.95), with proof of expense.
3.
Essential Perks
Post-trial, promotions yield at least a 5% salary increase. Retirement Allowance grants 5% of the last salary for each year exceeding 5 years with the company.
CURRENCY
(R$) Brazilian Real
WORKING HOURS
Max. 44 hours/ week
PUBLIC/BANK HOLIDAYS
12 Days per Year
CAPITAL
Brasília
LANGUAGE
PORTUGUESE
Leave Entitlements in Brazil
Paid time off, inclusive of public holidays, is augmented by additional leave entitlements for employees in Brazil. After 12 months of service with the same employer, the employee becomes eligible for vacation, to be granted within 11 months following the vesting period.
The recent labor reform introduced the possibility of taking vacations in up to three segments, with one period spanning at least fourteen consecutive days and others spanning at least five consecutive days each.
Cash allowance involves the conversion of 1/3 of the accrued vacation days into cash, with the employee having the option to request it within 15 days before the vesting period’s end. Paid leave or vacation is calculated based on the monthly salary plus an additional one-third bonus of the monthly salary, paid two business days before the leave’s start date.
- Sickness Allowance mandates a medical certificate within 48 hours.
- Marriage Leave comprises 3-5 consecutive working days.
- Maternity/Paternity Leaves encompass 120 days with full salary and 5 days after the child's birth.
- Other Leaves consist of 5 consecutive paid bereavement leaves.
EOR in Brazil
Guidelines
Employer of Record (EOR) is a business-friendly solution developed to help employ and organize your remote team in Brazil.
WHY USE A BRAZILIAN EOR:
- Hire the talent you need in Brazil, without having to open a legal entity;
- Fast and efficient onboard process;
- Easy and quick payment of Brazilian employees;
- No worries with Bureaucracy or legal procedures, as we do it for you.
Payroll and benefits
Contributions
- 28.8% social security – INSS;
- 8% - Employees Severance Indemnity Fund (FGTS)
- 7.5% to 14% - Social Security – INSS;
- 7.5% to 27.5 – Employee Income Tax (IRRF)
Standard working hours within Brazil are 44 hours per week, 8 hours per day, from Monday to Friday.
Overtime
Working on a holiday should be paid at the rate of up to 200.00% of the regular pay.
The right of workers to have life insurance is guaranteed, with the following minimum coverage:
- In case of natural death – the beneficiary will receive BRL 12,686.92;
- In case of accidental death or permanent disability by accident – the person responsible will receive BRL 19,029.93.
Leave
Paid time off:
With the labor reform, the fraction of vacations was made possible, which can be enjoyed in up to three periods, one of which cannot be less than fourteen consecutive days and the others cannot be less than five consecutive days, each.
Cash allowance: is the conversion into cash of 1/3 (one third) of the vacation days to which the employee is entitled. It is an option for the employee, provided that it is required within the period established in the labor legislation, which is up to 15 (fifteen) days before the end of the vesting period.
The Paid leave/ Vacation is calculated as a monthly salary plus an additional bonus of one-third of the monthly salary and must be paid two business days before the start date of the leave.
Sick Days:
Other Leave:
The employee may fail to attend the service from the subsequent date, without prejudice to the salary, until:
Medical and dental certificates will be recognized by companies to justify absences and delays.
As a general rule, absences from work must be communicated in writing by the employee (or his representative) to the company, within 48 (forty-eight hours) of the event motivating the leave.
The thirteenth salary, also known as Christmas bonus, was instituted in Brazil in 1962 by Law 4090. The rule guarantees that the worker receives the equivalent of one twelfth of the remuneration per month of service, that is, an extra salary at the end of each year. Payments will be paid in two installments:
- 1st installment: payment until November 30.
- 2nd installment: payment until December 20.
The employee may also request an advance of 50% of his 13th Salary, to be paid together with the vacation. In this case, the second installment is paid in December, with due discounts.
Other Informations
PAYMENT CURRENCY: Payments are made though Wire Transaction In USD (US Dollars) to WideBrazil and in BRL (Brazilian Real) to the Employee
VAT: Vat In Brazil Is A Combination Of Different Taxes And The Standard Rate Is 14.38%.
1. Dismissal without just cause: the end of the contract is at the sole will of the employer. In these circumstances, the employee is entitled to a prior notice period*, overdue vacation, plus 1/3, proportional vacation, proportional thirteenth salary, salary balance, in addition to a 40% fine on the FGTS (mandatory severance pay), which is the penalty for unmotivated dismissal.
*The notice may be indemnified – (30 days of salary to be paid) or worked (period of 30 days, in which the employee must continue working at the company until, in fact, he is terminated). If the termination is with mutual consent, the required notice period may be waived.
2. Dismissal for just cause: Occurs when the employee commits serious faults, in cases of dishonesty or misconduct, among others. In this case, the employee only receives the salary balance and the vacation periods due.
Resignation request: It is the worker’s declaration of will, independent, therefore, of the employer. The worker loses the right to prior notice (unless worked) and to compensation of 40% on FGTS deposits.
