Hiring guide in Brazil

Legal framework

Types of employment contracts

In Brazil, several types of employment contracts exist under the Brazilian Labor Code (CLT), each with specific rules and regulations. The most common is the Permanent Employment Contract, where the employment relationship has no fixed end date and requires notice and severance for termination. 

Fixed-term contracts are for temporary projects and can last up to two years, with limited renewals, while Temporary Contracts are used for seasonal work or specific situations, lasting up to 180 days. 

Part-time contracts allow employees to work fewer hours, typically 26 or 30 per week, while still receiving proportional benefits. 

The Intermittent Contract offers flexibility, where workers are hired on-demand and paid only for hours worked but still receive employment benefits. 

Apprenticeship Contracts are designed for young workers (14 to 24 years old) and combine work with vocational education, lasting up to two years. Lastly, Freelance Agreements apply to independent contractors, who provide services without the same legal protections as employees, unless otherwise agreed. Each contract type requires careful adherence to regulations, ensuring workers’ rights and benefits are upheld based on the nature of the employment.

Content of an employment contract

In Brazil, an employment contract must include several key elements to ensure compliance with the Brazilian Labor Code (CLT) and provide clarity for both parties. The contract should list the full names and contact details of both the employer and employee, along with the employee’s job title and a detailed description of their duties and responsibilities. It must specify the type of contract—whether it is for an indefinite term, fixed-term, part-time, temporary, or intermittent—and clearly state the workplace location.

The contract should outline working hours, including daily and weekly schedules, rest periods, and break times. It must also detail the employee’s salary, payment frequency, and any additional compensation such as bonuses or overtime pay. Other essential elements include a description of benefits such as vacation days, sick leave, and social security contributions.

The contract should also include any additional terms relevant to the employment relationship, such as confidentiality agreements or non-compete clauses. Finally, the signatures of both the employer and employee, along with the date, are required to formalize the agreement.

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Oral, written or electronic employment contracts

In Brazil, employment contracts can be established in oral, written, or electronic form, though written contracts are generally preferred for clarity and legal protection. Oral contracts are valid, particularly for informal or short-term work, but they can be difficult to enforce in disputes since there is no formal documentation of terms. 

Written contracts are the most common and are essential for formalizing specific employment details, such as job responsibilities, salary, work hours, and benefits. These contracts ensure compliance with the Brazilian Labor Code (CLT) and provide a clear reference for both parties. Electronic contracts are also increasingly accepted, as long as they meet legal requirements and include the digital signatures of both parties. Regardless of the format, it is crucial that the contract adheres to Brazil’s labour regulations and includes all necessary elements to ensure both the employer’s and employee’s rights are protected.

Probationary period

In Brazil, the probationary period, known as the “período de experiência,” is regulated by the Brazilian Labor Code (CLT). It allows employers to assess an employee’s suitability for a position before offering a permanent contract. The maximum duration of a probationary period is 90 days, which can be divided into two parts if agreed upon, such as an initial 45-day period with the option to extend for an additional 45 days.

During this period, either party can terminate the employment with reduced notice and severance obligations compared to a permanent contract. However, employees on probation are still entitled to basic labour rights, such as proportional salary, social security contributions, and benefits like vacation pay and the 13th salary. If the employee continues working beyond the probationary period, the contract automatically converts into a permanent employment agreement under the same terms.

Working hours

In Brazil, standard working hours are governed by the Brazilian Labor Code (CLT). The typical workweek consists of 44 hours, usually distributed as eight hours per day from Monday to Friday, with an additional four hours on Saturday. Alternatively, employers may adopt a system of five eight-hour workdays with no work on Saturdays. Employees are entitled to at least one hour of break for meals during shifts longer than six hours.

Breaks and night work

In Brazil, labour laws ensure that workers receive proper breaks and compensation for night work. For shifts longer than six hours, employees are entitled to a meal and rest break of at least one hour, but no more than two hours. For shifts lasting between four and six hours, a 15-minute break is required. These breaks are meant to give employees time to rest and are typically unpaid.

Night work, defined as work performed between 10:00 p.m. and 5:00 a.m., is subject to special regulations. Employees working during these hours are entitled to an additional 20% increase in their hourly wage. Furthermore, each hour of night work is legally considered to be 52 minutes and 30 seconds, meaning that night workers accumulate more hours faster compared to daytime workers.

Overtime during night shifts is compensated at a higher rate, and all other benefits, including rest breaks and social protections, apply. These regulations are in place to ensure fair compensation and to safeguard the health of employees working during night hours.

Annual leave

In Brazil, employees are entitled to annual leave, known as “férias,” under the Brazilian Labor Code (CLT). After completing one year of continuous employment with the same employer, workers are entitled to a minimum of 30 days of paid vacation. This leave can be taken all at once or divided into up to three separate periods, subject to mutual agreement between the employer and employee. 

Employees must receive their vacation pay, which is calculated based on their regular salary, plus an additional one-third (1/3) of the salary as a vacation bonus. Employers are required to schedule vacations within 12 months following the employee’s anniversary date, ensuring that the leave is taken in a timely manner.

If an employee does not take their vacation within this period, they may lose the right to the unused days, although exceptions apply in cases of termination. The purpose of annual leave is to provide employees with time to rest and recharge, promoting their overall well-being and productivity.

Public holidays

In Brazil, employees are entitled to several public holidays, which are established at both the national and regional levels. The main national holidays include:

• New Year’s Day – January 1
• Carnival – Date varies (February or March, depending on the year)
• Good Friday – Date varies (Friday before Easter Sunday)
• Labor Day – May 1
• Independence Day – September 7
• Nossa Senhora Aparecida (Patroness of Brazil) – October 12
• All Souls’ Day – November 2
• Republic Day – November 15
• Christmas Day – December 25

Additional Observances: Carnival Monday and Tuesday – Some regions observe these days, although they are not official public holidays.

Regional Holidays: Various states and municipalities have their own local holidays that may include specific cultural or historical celebrations.

Employers must adhere to these holidays and provide appropriate time off or compensation for work performed on these days.

Salary

In Brazil, wages and contributions are governed by the Brazilian Labor Code (CLT) and are designed to ensure fair compensation and social security for employees. The minimum wage is set by the federal government and is periodically adjusted to reflect inflation and cost of living changes. Employers must pay at least the national minimum wage, which applies to all employees, regardless of their job type.

Employers must also comply with additional labour obligations, such as providing benefits like paid vacation, sick leave, and maternity leave. Overall, these regulations ensure that employees receive fair wages and contribute to their social security and welfare.

To calculate the salary and taxes in Brazil, click here.

Sick leave

In Brazil, sick leave is governed by the Brazilian Labor Code (CLT) and provides employees with necessary protections and benefits in case of illness. When an employee is unable to work due to health issues, they are entitled to a sick leave period, which can last up to 15 consecutive days. During this time, the employee must provide a medical certificate to justify their absence. 

For the first 15 days of sick leave, the employer is responsible for paying the employee’s full salary. After this period, if the employee remains unable to work, the case is referred to the National Institute of Social Security (INSS), which will provide sickness benefits. The amount of the benefit is based on the employee’s average salary, and it can vary depending on the length of their contributions to Social Security.

In addition to regular sick leave, employees are also entitled to paid leave for specific health-related issues, such as maternity leave, which lasts for 120 days or leave for caring for sick family members, which is subject to specific regulations. Overall, these provisions ensure that employees have the support they need during periods of illness while maintaining job security.

Paternity and maternity leave

Maternity leave is granted to female employees for a total of 120 days (approximately four months) around the time of childbirth in Brazil. This leave can start up to 28 days before the expected delivery date and must be taken consecutively. During maternity leave, the employee is entitled to receive her full salary, which is paid by the employer.

The employee may also extend her leave by an additional 60 days under the “Citizen Company” program if the employer participates in this initiative, allowing for a total of 180 days of leave. Additionally, mothers are entitled to a nursing period of up to six months after returning to work, during which they can take two daily breaks for breastfeeding.

Paternity leave in Brazil is granted to male employees for a period of 5 days following the birth of a child. During this time, fathers are entitled to their full salary. Similar to maternity leave, fathers working for companies that participate in the “Citizen Company” program can extend their paternity leave to 20 days.

Methods of employment termination

The termination of employment in Brazil is regulated by the Brazilian Labor Code (CLT) and can occur in several ways. Termination without cause requires a 30-day notice or equivalent salary payment, along with the payment of the severance indemnity fund (FGTS), including a 40% fine, and proportional vacation and 13th salary. Termination with cause occurs for employee misconduct, allowing the employer to terminate without notice or severance.

Mutual agreement between employer and employee can also lead to termination, with specific benefits provided. Employees may resign with a 30-day notice, entitled to their final salary and unused vacation pay. Additionally, termination may occur due to long-term health issues, requiring medical assessment. Overall, employers must adhere to legal procedures to ensure fair treatment and avoid disputes.

Ordinary dismissal by employer

Ordinary dismissal by an employer in Brazil, also known as termination without cause, occurs when an employer decides to end an employee’s contract for reasons not related to performance or misconduct. In such cases, the employer must provide a 30-day notice period or compensate the employee with an equivalent salary payment. 

Upon termination, the employer is required to pay several entitlements, including the total balance of the Severance Indemnity Fund (FGTS), which includes 8% of the employee’s salary accrued during employment, along with a 40% fine on this amount. The employee is also entitled to any unused vacation pay and the proportional 13th salary. It’s essential for employers to document the termination properly to comply with labour laws and avoid potential legal disputes, as employees have protections in place to ensure fair treatment during the dismissal process.

Notice period and challenging the dismissal

In Brazil, the notice period for ordinary dismissal, or termination without cause, is set at 30 days. Employers can choose to provide this notice in advance or offer a payment equivalent to the employee’s salary for that period instead. If an employee has more than one year of service, they are entitled to an additional three days of notice for each year of service, up to a maximum of 90 days.

Employees have the right to challenge a dismissal if they believe it is unjust or discriminatory. They can file a complaint with the Ministry of Labor or pursue legal action in labour courts. Common grounds for challenging a dismissal include claims of retaliation, discrimination based on race, gender, or disability, or violations of labour laws.

If a court finds that the dismissal was unlawful, the employer may be required to reinstate the employee or provide compensation for lost wages and benefits. This legal framework ensures that employees are protected against unfair treatment and have avenues for seeking justice in cases of wrongful termination.

Rights and obligations of unemployed individuals

In Brazil, individuals have specific rights and obligations to support them during unemployment. They are entitled to unemployment insurance for three to five months if dismissed without cause, access to job placement services, and participation in training and requalification programs to enhance their skills. Additionally, they may be eligible for certain social security benefits, such as healthcare, if they meet contribution requirements.

To maintain these benefits, individuals must actively seek employment and may need to prove their job search efforts, register with local employment agencies, and participate in training programs if offered. They are also required to notify authorities if they find new employment and cease collecting unemployment benefits. These measures aim to assist unemployed individuals while promoting their engagement in the job market.

Severance pay

In Brazil, severance pay is primarily associated with the termination of employment without cause and is governed by the Brazilian Labor Code (CLT). When an employee is dismissed without cause, they are entitled to several forms of compensation as part of their severance package. This includes:

1. Severance Indemnity Fund (FGTS): Employers must pay the total balance of the FGTS, which is 8% of the employee’s salary accumulated throughout their employment. In addition to this balance, employers are required to pay a 40% fine on the FGTS amount, which serves as additional compensation for the employee upon termination.
2. Proportional Vacation Pay: Employees are entitled to receive payment for any unused vacation days, calculated based on their salary.
3. Proportional 13th Salary: The employee is also entitled to the proportional 13th salary, which is equivalent to one-twelfth of the annual salary for each month worked during the year.
4. Notice Period: If the employer does not provide the required 30-day notice, they must compensate the employee with an additional payment equivalent to the employee’s salary for that period.

These severance payments are designed to provide financial support to employees during their transition to new employment and are part of Brazil’s labour laws aimed at protecting workers’ rights.

Prohibition of competition

In Brazil, the prohibition of competition is typically addressed through non-compete agreements, which are designed to protect an employer’s business interests by preventing employees from engaging in activities that compete with the employer after leaving their jobs. Non-compete clauses must be explicitly stated in the employment contract and can only be enforced under certain conditions. 

If an employee violates a non-compete agreement, the employer may seek legal recourse, which could include injunctions to prevent further competition and potentially monetary damages. However, employees should be aware of their rights and ensure that any non-compete agreements are fair and reasonable before signing them.

Remote working policy

A remote working policy in Brazil outlines the expectations for employees working from home, which has gained popularity since the COVID-19 pandemic. It should specify eligibility criteria, define work hours and availability, and establish communication protocols, including preferred tools and check-in frequency. The policy must also set clear performance metrics, address data security measures, and clarify which equipment will be provided by the employer along with reimbursement for related expenses.

Additionally, it should remind employees of their responsibility to maintain a safe working environment and include provisions for reviewing and potentially terminating remote work arrangements. A comprehensive policy helps ensure productivity, compliance with labour laws, and employee satisfaction.

Intellectual property rights

Intellectual property rights (IPR) are essential for protecting the creations of individuals and organizations in Brazil, particularly in the context of remote work arrangements. These rights encompass various forms of intellectual property, including copyrights, patents, trademarks, and trade secrets. 

Employees and employers must understand that any intellectual property developed during the course of employment—such as software, inventions, designs, or written content—generally belongs to the employer if it is created using company resources or within the scope of employment duties. To protect these rights, organizations should establish clear policies regarding intellectual property ownership in their remote working agreements, specifying what constitutes company property and how it should be handled.

Employee data privacy

Employee data privacy is a critical concern in Brazil, especially with the rise of remote work, where personal and professional information may be more vulnerable to breaches. Under the General Data Protection Law (LGPD), employers are required to implement measures to protect the personal data of employees, which includes information related to their identification, contact details, health data, and employment history. Organizations must ensure that employee data is collected, processed, and stored securely and used only for legitimate business purposes, such as payroll processing, performance evaluations, or compliance with legal obligations.

Responsibilities within remote work arrangements

In a remote work arrangement, both employers and employees have specific responsibilities to ensure a productive and efficient work environment. Employees are expected to maintain productivity levels and meet performance metrics outlined in the remote working policy. They should communicate regularly with supervisors and team members, attending scheduled meetings and providing updates on work progress. Effective time management is essential, as employees must adhere to work hours and meet deadlines for tasks and projects. 

Additionally, employees are responsible for ensuring the security of sensitive company information by following established data protection protocols and using secure networks. They should create and maintain a safe and ergonomic workspace to promote health and well-being while working remotely. Lastly, employees must comply with company policies, including remote work guidelines and the code of conduct, to maintain professionalism and contribute to a positive work culture.

Health and safety at home

Health and safety in a remote work environment are crucial for ensuring that employees remain healthy and productive while working from home. Employers should encourage employees to create an ergonomic workspace that includes a comfortable chair, proper desk height, and adequate lighting to reduce the risk of musculoskeletal disorders and eye strain. Regular breaks should be emphasized to prevent fatigue and promote mental well-being, allowing employees to rest their eyes, stretch, and move around. 

Additionally, employers should provide guidance on maintaining a safe home environment, such as securing cables to prevent tripping hazards and ensuring that electrical equipment is used safely. Employees should also be encouraged to prioritize their mental health by maintaining a work-life balance, staying socially connected with colleagues, and utilizing available mental health resources. By promoting health and safety at home, employers can help enhance overall employee well-being and productivity in a remote work setting.

What are the advantages of hiring employees from Brazil vs other countries?

Hiring employees from Brazil offers several advantages compared to sourcing talent from other countries. First, Brazil has a large and diverse talent pool, particularly in fields such as technology, engineering, and creative industries. The country’s emphasis on education and a growing number of skilled professionals make it an attractive option for companies seeking expertise. 

Second, Brazil’s time zone aligns well with North America and Europe, facilitating real-time collaboration and communication for companies that operate globally. This can enhance productivity and streamline project management, as teams can work together during overlapping hours. Also, labour costs in Brazil can be competitive, particularly when compared to certain countries in North America and Western Europe. While labour laws can be complex, the overall cost of hiring skilled professionals in Brazil may be lower than in developed markets, allowing companies to optimize their budgets.

Additionally, Brazil is known for its vibrant culture and creativity, which can bring innovative ideas and fresh perspectives to a business. Companies hiring Brazilian employees may benefit from cultural diversity, which can enhance creativity and problem-solving within teams.

Lastly, establishing operations in Brazil can provide companies with access to the larger Latin American market, potentially leading to business growth and expansion opportunities. Overall, hiring employees from Brazil can offer a combination of skilled talent, cost efficiency, and cultural richness that can enhance a company’s competitiveness on a global scale.

Why use Native Teams for hiring in Brazil?

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• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.