Considering employing someone in Brazil? To do that compliantly, an employer has a lot of obligations they have to fulfil. One comprehensive and important topic is the set of local employee rights a worker residing in Brazil is entitled to.
Below is a guide to employee rights in Brazil to help you understand what you need to comply with. (You can read about employee rights in Australia, Canada, Croatia, Ireland, France, the UK, Portugal, Poland, Germany, The Netherlands, Lithuania, and New Zealand).
To employ someone in Brazil, you need to be a registered employer. To get a full overview of what employing someone in Brazil would take and see all the obligations you will have as an employer, please read our Brazil Country Guide. (For a more general list of what you need to do in every country to employ someone, check out this list).
Alternatively, you can work with an Employer of Record, such as Boundless, which will employ the worker on your behalf locally. That would spare you any registrations and ensure compliance with employment and tax law, all the while assuring harmonised experience for your employees there.
Regardless of the employment approach, all employees in Brazil are entitled to the following employee rights.
Even though the law doesn’t require a written employment agreement, it’s highly recommended and common practice to enter into one specifying the terms and conditions as well as obligations that come with the job. Employment contracts can be in two languages (i.e., dual-language contracts) and must include a Portuguese version. The Portuguese version always prevails over the terms in the employment contract in a different language if the issue ever rises.
An employment contract, including the signature of the employer, must be delivered to the employee within 48 hours of starting a new job. The contract should include the following:
The minimum statutory employee rights are often implied terms that include minimum wage, FGTS entitlement, 13th salary, holiday entitlement, break rights, and any applicable collective bargaining agreements (CBAs).
CBAs with trade unions are automatically binding on all employment contracts. These agreements are valid for a maximum of two years and are negotiated between the employee union and the employer union (or the company itself).
Changes to the terms and conditions of employment are forbidden and void if they are less favourable to the employee.
It’s an employee’s right to receive a copy of their pay slip monthly, with a breakdown of all the deductions involved. The payslip can take a physical or an electronic form.
Employers can make deductions from an employee’s pay in the following circumstances:
It’s an employer’s responsibility to care for employees’ health and safety at work. Companies must take measures to prevent job-related accidents and diseases arising out of work conditions and train and educate employees on how to perform work safely.
Employers must provide employees with the appropriate protective equipment, ergonomic workspace, training, medical examinations, and guidance on how to work safely.
Specific rules vary by industry and company size. They are dictated by the Ministry of Labour and Employment (MTE).
Every employee is entitled to 30 days’ paid time off per year after 12 months of service. On top of receiving their regular salary during the holiday, employees are entitled to a holiday bonus equal to one-third of their monthly salary. This bonus must be paid at least two days before the employee goes on vacation.
Holiday entitlement is lowered if the employee has a certain number of unjustified absences yearly. Employees may request their employers to convert one-third of their unused vacation for the equivalent in cash.
Every employee is entitled to unemployment funds — seguro desemprego — if their employment is terminated without cause. The government allowance varies based on the employee’s salary in the preceding three months and cannot be lower than the minimum wage. The period an individual is entitled to receive the benefit for depends on their tenure.
To be entitled to the benefit, employees must meet the following criteria:
In addition, those applying for the benefit for the first time need to have received a salary from a company for at least 12 months during the 18 months immediately preceding the date of dismissal. The benefit is paid out in four instalments if covering 12 – 23 months, and five instalments if covering 24+ months.
Every employee in Brazil is entitled to the FGTS, an unemployment guarantee fund to which employers contribute 8% of the employee’s gross salary monthly, without any discount to their salary. Employers must open a blocked bank account with the national bank for each employee, where they will deposit their contribution monthly.
Employees get access to the funds when they are terminated without cause, retire, buy a house, or suffer a serious illness. In case of an employee’s dismissal without cause, the company must pay an indemnification equivalent to 40% of the employee’s FGTS balance.
Yearly, every employee is entitled to receive an additional month’s wage also called the Christmas bonus. It can be (1) paid in full by the 20th of December or (2) divided in half and paid between February and November and again in December. Employees may request one-half to be paid along with their vacation bonus.
Employers must provide this benefit to all employees who have worked all 12 months of the year. Those who join the company later in the year are entitled to a proportional fraction of the 13th salary (monthly salary divided by 12 and multiplied by months worked in the year).
The 13th salary can be paid as a lump sum at the end of December or divided into two equal payments: (1) between February and November and (2) by the 20th of December. Employees who are dismissed are also entitled to the pro-rated equivalent of their 13th-month salary.
Employees who must commute home from work are entitled to transportation vouchers provided by their employers to cover the costs of the commute. Companies can deduct up to 6% of the employee’s monthly gross salary to cover the costs of the transportation voucher but must top up the remainder without any additional costs to the employee.
Employees who don’t need to commute, such as remote workers, are not entitled to this benefit.
In Brazil, employers cannot discriminate against employees in any stage of employment — from hiring to promoting and dismissing — based on the following grounds:
In Brazil, employers can dismiss employees without cause as long as they respect the notice period and provide the severance pay. However, they would need to pay a 40% penalty of FGTS. Employers need to justify the dismissal in case of termination with cause only.
However, some categories of employees benefit from additional protection against dismissal for a defined period:
In Brazil, a period of continuous employment doesn’t create any statutory rights for employees; however, employees retain their period of continuous work as it applies to holiday rights, notice period, and FGTS entitlement. Employees can be transferred between companies of the same economic groups in a merge and acquisition transaction or as part of an asset purchase. The transfer is automatic if it doesn’t interfere with the employment, and the new employer must comply with the labour obligations that were applicable to the previous employer.
The employment terms and conditions cannot be changed as a result of a transfer unless the employee agrees to the change. If the terms are detrimental to the employment conditions, the terms will be considered void. There is no protection against dismissal on a business transfer.
The Lei Geral de Proteção de Dados Pessoais (LGPD), the equivalent to the EU’s GDPR, has recently taken effect in Brazil. It applies to any business or organisation that processes personal data regardless of where that business or organisation itself may be located. There are nine fundamental rights that data subjects have:
Companies have ten obligations when processing data:
Until recently, union membership was mandatory. However, union memberships are now optional to employees. Those who join a union must pay an annual fee equivalent to one full day of their wage. Unions are a big part of the employment scene in Brazil, and most industries have collective agreements that provide workers with better benefits.
Employers cannot refuse, impose, discriminate, or treat an employee differently because of their union membership status. Employees are free to engage with whichever trade unions they prefer.
Adhering to employment law and employee rights in Brazil will require a commitment to learning and working with a lot of local regulations. We are here to help you on that journey and take the time to make sense of complex legislative information, which we turn into easy to understand resources and comprehensive country guides (check our guide to Brazil).
However, staying on top of Brazilian employment law may not be a top priority for you right now. That doesn’t mean you should give up on employing your next remote worker out of Brazil or opt for hiring them as an independent contractor instead (which is a bad idea).
Boundless can help you employ anyone in Brazil legally and hassle-free. Through the Employer of Record model, we act as the legal employer to your remote workers and take care of the many obligations that come with adhering to these employee rights in Brazil. Learn more.
