Why work in
Grow your team in
Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in Brazil must have a local legal organization and use local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Brazil makes compliance with employment laws demanding.
With Gloroots’s global Employer of Record (EoR) service, you can let Gloroots do the heavy lifting of payroll, tax, benefits, and compliance and concentrate on what matters to you most: your employees and company growth.
Risks of misclassification
The term "misclassification of employees" refers to the inaccurate classification of workers by their employers. Misclassification occurs when an employer categorizes a worker as an independent contractor or exempts them from certain employment laws and benefits, even if the worker should be classified as an employee and entitled to legal protections, benefits, and rights. Utilizing a PEO/EOR in Brazil helps mitigate the risks associated with misclassification by ensuring compliance with labour laws, proper employee classification, accurate payroll processing, and access to comprehensive benefits. This enables businesses to focus on their core operations while entrusting employment-related responsibilities to experienced professionals.
Brazil's employment regulations are shaped by a combination of legal instruments, including the country's constitution, international treaties, employment contract laws, federal statutes, and collective bargaining agreements.
In order to engage in employment activities within Brazil, businesses must comply with the country's labour regulations that are designed to protect the rights and interests of workers. Due to the dynamic nature of regulations, it is imperative for companies to remain vigilant in order to ensure compliance.
Legal aspects of employing in
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Brazil's labor laws are primarily governed by the Consolidation of Labor Laws (CLT - "Consolidação das Leis do Trabalho"), instituted in 1943. The 1988 Brazilian Constitution also has several labor provisions. The CLT and the Constitution together define workers' rights in Brazil.
Brazilian labor law does not strictly require employment contracts to be in writing., Even oral agreements are legally legitimate. However, it is best practice to put in place a written employment contract. The contract should define the following:
- The name and address of both parties
- Date of beginning employment (and length of work for temporary contracts, if applicable).
- Location(s) of employment
- The job description, in addition to the obligations and obligations,
- In addition to the base wage, supplementary compensation or perks provided.
- Time on the job and additional hours worked
- The total amount of days off each year
- Terms of employment that require prior notification before termination
- Probation period
- Policies of the company pertaining to topics such as information technology practices.
- Reference to collective bargaining agreements
Although employment contracts in Brazil are typically permanent in terms of duration, it is possible to negotiate a contract with a set length in specific situations. However, their length cannot be longer than two years at the most. Employment contracts in Brazil should always be written in Portuguese. Salaries defined in the contract must be specified in Brazilian Real.
This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.
Generally 8 hours per day, 40 hours per week
When an employee works more than eight hours in a day, it is considered overtime and should be compensated at a rate that is equal to 150% of the employee's hourly wage . However, a limit of two hours per day can be worked overtime, which brings the total daily working time up to a maximum of 10 hours.
The country observes 13 public holidays employees can take as paid days off.
Employees in Brazil can choose to be paid either once or twice each month. The legislation requires that monthly salaries be paid by the 30th of the month or by the 5th of the following month, whichever comes first.
The monthly minimum salary in Brazil is presently fixed at BRL 1,302 per month (as of February 2023) and is considered to be the country's "floor wage." A number of states have their own regional minimum wage, and in certain cases, this rate is greater than the national minimum wage. The rise in the minimum wage rate of BRL 1,320 is slated to take effect in May of 2023.
When employees are absent from work due to illness for the first 15 days, they receive their regular pay from the employer if they provide a medical certificate on time. If the sick leave extends beyond 15 days, Social Security provides fixed-rate sick pay to the employee.
Female employees are entitled to 120 days of paid maternity leaves. Employees can begin their week 28 days before their due date.
Employers can also extend and grant paid leave up to 60 days over the mandated number. Employers can avail a tax refund over this additional payment.
Additionally, employers are obligated to offer time-offs for their female employees during their pregnancy period.
Male employees are entitled to receive five days of parental leave per year. Employers can also offer an additional 15 days of paid parental leave. They can recover the salary paid during the employee’s leave from the government in the form of tax breaks.
OTHER TAX AND SOCIAL SECURITY CONTRIBUTION
Employer payroll contribution
Employee payroll contribution
Brazilian labor legislation permits either the employer or the employee to provide notice to terminate an employment contract. When a local employee's employment is terminated, it is required that their salary be paid on their final day of work.
If an employee resigns without providing prior notice, their salary for the period they worked must be settled within seven days from their last day of employment. In cases where termination is a result of misconduct, the employee's salary should be settled on their final day of work. In situations where unforeseen circumstances prevent immediate payment, the employee must still receive their salary within three business days.
In the majority of circumstances, severance compensation is obligatory and consists of the following:
- Salary Owed: When an employee's contract is terminated, the employer is responsible for paying any outstanding salary owed up until the date of termination. This includes regular wages, overtime, or any other unpaid earnings.
- Payment for Unused Vacations: If an employee has accrued vacation days that have not been used, the employer is obligated to provide financial compensation for those unused vacation days. The amount is calculated based on the employee's daily wage multiplied by the number of unused vacation days.
- Prorated Yearly Bonuses: If the employment termination occurs before the payment of the yearly bonus, the employee may still be entitled to a prorated portion of the bonus. The exact calculation depends on the company's bonus policy and the length of the employment during the bonus period.
- Accumulated FGTS Deposit: The Guarantee Fund for Length of Service (FGTS) is a mandatory savings fund in Brazil. When an employment contract is terminated, the employer must provide the employee with the accumulated balance in their FGTS account, which includes the monthly deposits made by the employer during the employment period.
- Extra Penalties: In some cases, additional penalties may apply depending on the circumstances of the termination. For instance, if the termination is deemed unlawful or violates labor regulations, the employer may be subject to extra penalties as determined by Brazilian labor laws.
In Brazil, it is essential for both employers and employees to have a solid understanding of these policies.
For example, if an employee has worked for 2 years, the notice period for the employer to terminate the employment would be 33 days (30 days + 3 days for the additional year). If the employee has worked for 5 years or more, the notice period would be the maximum of 90 days.
It's important to note that these are the statutory notice periods, and individual employment contracts or collective bargaining agreements may provide for different notice periods. Additionally, in some cases, employers may be required to provide severance pay or other benefits upon termination, depending on the circumstances and applicable labor laws.
Employees and employers are free to negotiate the terms of a probationary period, which must then be written into the employment contract. In Brazil, probationary periods are limited to a maximum of ninety days.