Brazil 7 min

Employment laws in Brazil: How to hire and stay compliant

Written by Shay Ogunsanya
Shay Ogunsanya


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As the biggest country in South America and among the top economies in the Americas, Brazil is a solid choice for companies who are looking for an attractive market to source talent. 

Depending on your business needs, you might be looking to hire a full-time employee, who can either work at an office or remotely. Alternatively, if you want someone to work on a project on a short-term basis, you might decide to recruit an independent contractor. Both of these arrangements come with certain legal responsibilities.

However, before you consider hiring in Brazil, you need to get familiar with the Brazilian labor law and wrap your head around its intricacies. Compliance with local rules and tax laws is essential, and many companies struggle to adhere to the requirements. Payroll is also tricky as requirements vary across countries.

The best way to hire and pay remote workers in Brazil (and beyond) is to work with an employer of record who can handle the legal responsibilities for you and ensure compliance.

In this guide, we’re going to explain key labor laws in Brazil, statutory employment rights, and unique considerations for employers looking to hire in Brazil. We’ll also explain why partnering with EOR like Remote is the fastest and the simplest way to stay compliant with Brazilian employment laws.

Understanding key labor laws in Brazil

Employment law in Brazil has different sources, including:

  • the Consolidated Labor Laws (CLT)

  • the Brazilian Federal Constitution; and

  • various decrees and regulations constituted by the Ministry of Labor and Employment.

Additionally, Collective Bargaining Agreements (CBAs), which we discuss in detail later, also impact the employee-employer relationship. They dictate the annual salary increases and regulate employees’ rights and benefits. Overall, employment law in Brazil tends to favor employees, which is something to keep in mind while hiring in the country. 

What do you need to know before hiring an employee in Brazil?

To attract more foreign investment, the Brazilian government has modified its employment laws over the years to increase flexibility. However, despite the government's best efforts to make the job market more accessible to foreign businesses, wrapping your head around local legalities can be hard. 

To ensure legal compliance, employers who think about hiring remote employees abroad have to establish their own legal entity in Brazil or work with a global employment solutions provider, also known as an EOR. While both of these options allow companies to legally hire employees in Brazil, working with a global employment service is significantly less complex and time-consuming. 

Remote owns its own legal entity in Brazil, which means you can be assured of top-quality service, affordable pricing, and maximum security for your data and intellectual property. Whether you want to hire full-time employees or contractors, Remote will take care of contracts, onboarding, benefits, invoicing, and payroll Check out our detailed guide on how to choose an employer of record in Brazil for more information on how you can use an EOR to expand your team in Brazil.

link to How to use an Employer of Record in Brazil
12 min

How to use an Employer of Record in Brazil

Learn how to use an EOR in Brazil and find out how an employer of record platform like Remote can make it easy to hire globally with full compliance.

Statutory employment rights in Brazil

What is the minimum wage in Brazil?

As of January 2024, the minimum wage in Brazil stands at 1,412 Brazilian reals per month. 13th-month-pay is mandatory in Brazil.

What are the standard working hours in Brazil?

It’s the CLT and the Brazilian Federal Constitution, among other constitutional rights, that regulate the working hours in Brazil (including overtime). Workers can work eight hours a day or 44 hours per week, unless stated otherwise in an employment agreement or a collective bargaining agreement. This number can only be exceeded by a few hours. Employees who work more hours than they are legally obliged to are entitled to overtime pay of 150%. If the overtime takes place during an employee’s weekly time off or on holidays, they’re entitled to double pay.

How do probation periods work in Brazil?

The maximum probation period in Brazil is 90 days, or in two terms totaling 90 days. If initially, an employee is subject to 45 days of probation, then it can be extended by an additional 45 days. 

What discrimination protections does Brazil provide for workers?

Discrimination laws are regulated by the Federal Constitution and Law No. 9029 1995. Discrimination causing unequal treatment, including duties or salaries, is prohibited on the following grounds:

  • Disabilities

  • Gender, sex, marital status, or family situation

  • Race, skin color, or origin  

Employers cannot discriminate against employees or candidates during the employment relationship or hiring process. Companies can come up with non-discriminatory policies, which all employees will have to abide by. They can also put their management staff through training to ensure no discriminatory practices take place. 

Can employees in Brazil join unions?

The short answer is, yes. Both employers and employees must be part of a union. Its choice will depend on the type of activity that the employer or employee performs and the state they’re in. 

Are there collective bargaining agreements in Brazil?

CBAs in Brazil, which are negotiated and executed by the unions, have the same status as Brazilian labor law and guide the relationship between the employer and the employee. This means companies and workers must follow the provisions. Otherwise, they will be subject to penalties. 

What are the unique considerations for employers hiring in Brazil

There are a few things you have to bear in mind while hiring in Brazil. If you recruit employees remotely, then you’re legally obliged to supply them with the necessary equipment like a laptop and a phone and pay their utility bills. You also have to follow Health and Safety standards — these apply to both home and office workers. All your employees will have to sign an employment contract that acknowledges receiving specific training related to ergonomic standards and occupational H&S. 

You’re also obliged to provide statutory benefits, such as:

  • Paying a minimum wage by worker category.

  • Working eight hours per day or 44 hours per week.

  • Making a 13th month payment.

  • Social security benefits that both the employer and the employee must contribute to. 

The two contract types are:

  • Indefinite term, which is the most common type of contract. It doesn’t have an end date and entitles the employees to all the rights guaranteed by the employment law in Brazil. 

  • Definite term which includes a standard contract, an experience contract, and an apprenticeship contract. The first one can’t exceed two years, the second one is valid for up to 90 days, and the third one can’t exceed two years. 

Calculate employee hiring costs in Brazil with Remote’s Salary Calculator

If you want to find out how much it costs to hire an employee in Brazil, check out Remote's free Employee Cost Calculator. Simply plug in the country, the position you want to hire for, and pay, and our calculator will give you an estimate of how much it would cost to hire a candidate in the country.

If you have questions on the next steps, contact our friendly team to find out how you can use Remote's global HR platform to hire in Brazil quickly and compliantly.

Budget your next hire with our free Cost of Employment Calculator

Use the calculator to find the total cost to hire an employee in a new country including all government mandated contributions.

Managing employee offboarding in Brazil

Employment laws in Brazil enable employers to terminate a worker’s contract at any given moment, provided that they give no less than 30 days of notice. Offering employees more than 30 days of notice isn’t always discretionary. For every year worked with the organization, the worker is entitled to three additional days of notice — and this goes all the way up to a 90-day limit. Finally, Brazil's employment laws recognize a few instances where the worker can be terminated due to cause, without notice. 

For the termination to be legal, it must be provided in written form, dated, and signed by relevant parties. 

We explore these and other employee offboarding considerations in detail below.

Does at-will employment exist in Brazil?

Yes, employers are not obliged to provide cause. However, this comes with a set of additional requirements and employee protections. For starters, the worker needs to be given enough notice — anywhere between 30 and 90 days, as regulated by employment laws in Brazil.

All the employee’s benefits need to be paid out in cash. Among others, these include any accumulated vacation days, unpaid bonuses, a 13th-month salary, and 40% of the money deposited in their name in the indemnity fund (i.e. the Time of Service Guaranteed Fund, FGTS). If the employer prefers to release the worker from their duties during the notice period, they must still pay the relevant salary for the remaining days of legal employment. They will also have to provide severance.

These are the general conditions for most of the workforce. However, as in many other countries, Brazil also recognizes specific worker groups that are protected from termination without cause. We discuss this in detail further in this section.  

Do employment laws in Brazil recognize termination with cause?

To protect employers from employee misconduct, Brazil recognizes several instances in which the employer can terminate a worker immediately, with cause.

Some substantial reasons that allow for termination with cause are:

  • Deliberate breach of confidential information. The employer must be able to provide proof that the worker disclosed company secrets willingly and that their act has put the business at financial risk (or has already resulted in a financial loss).

  • Change of circumstances that impact the worker’s status. For instance, if the organization doesn’t hire employees with a criminal record and the employee becomes convicted of a crime, their contract can be immediately terminated.

  • At least three events of negligence, accompanied by a formal disciplinary procedure and employee warnings. Some examples that fall under this clause include:

    • missing project deadlines continuously

    • making decisions the worker isn’t entitled to

    • not showing up to work

    • low productivity which lasts for an extended period.

  • Improper behavior or harassment towards any other staff members, including mobbing, verbal or physical violence, sexual assault, and racism. The only exception is when violence is used in self-defense or the defense of third parties.

If the employee is terminated due to any of the above conditions, their salary will have to be paid on the last day of their work. Should any external circumstances, such as a national holiday, make it impossible to pay out the salary immediately, the employer is entitled to do so within three working days.

Does Brazil observe employee termination protection for any workers?

Brazilian law protects several employee groups from termination without cause. The duration of the protection depends on the exact circumstances and status of the worker. These categories include:

  • Workers who have suffered from a work-related sickness or accident provided that they were absent from work for no less than 15 days, i.e., received benefits from the FTGS. These employees are protected from termination for a year from their recovery (i.e., returning to work).

  • A union leader candidate.

  • A former union leader, for 12 months from ending their term.

  • Workers who have been named as the leaders of internal accident prevention commissions, starting from the day they become a candidate to a full year after their term has run to an end.

  • Pregnant employees — starting from the moment their pregnancy is confirmed, all the way through to the fifth month post labor.

  • Employees who are less than one year from their retirement.

Should any of these workers be terminated without cause, they are entitled to take the case to court. According to Brazilian law, if the termination is ruled illegal, the employees will be reinstated to their roles.

Are terminated employees in Brazil entitled to severance pay?

If a worker’s contract is terminated with cause, they will receive no severance pay. They will, however, be entitled to:

  • Their salary.

  • Accrued holidays

  • A proportional part of the 13th annual salary (where each month in the calendar year is treated as 1/12th of the 13th salary).

  • An equivalent of one month’s salary for each year they’ve worked for the organization.

  • Any entitlements agreed upon in collective bargaining agreements and stipulated in the worker’s employment contract. 

Employees who have been terminated without cause will be entitled to all of the above, as well as a penalty for dismissal. This is an equivalent of 40% of the funds that the hiring party has accumulated in the employee’s FGTS severance compensation fund throughout the employment. The amount paid to the employee depends not only on their tenure, but also on salary — FGTS contributions are equal to 8% of the worker’s monthly remuneration.

If an employment contract is terminated amicably, through an agreement between both parties, the severance pay will be lower than in the case of termination without cause. Namely, on top of all the rights listed above, the worker will receive an equivalent of 20% of the funds deposited in the employee’s FGTS account.

Finally, employment laws in Brazil also protect workers hired on fixed-term contracts, which don’t have a provision allowing early termination without cause. If an employer decides to terminate the contract without notice, they must pay the worker 50% of the remuneration they would have received if they rendered their services for the rest of the agreed contract duration term. 

Differences between employees and contractors in Brazil

According to the Brazilian Labor Code, an employee is an individual who offers their services to a single company permanently, under their direction and in exchange for a salary. The aspect of professional subordination of the employee to the employer is of crucial importance here. 

An independent contractor, on the other hand, falls under the Brazilian Civil Law, which states that any company can hire a contractor to perform services for them under a contract. The independent contractor should be free to decide how and when they will do the work. Brazilian Labor courts have listed factors linked to subordination. These include:

  • No authority to decide how the work will be done

  • No right to set their own work hours

  • The necessity to present reports and observe past targets. 

We dive into more details on the differences between employees and contractors below. 

What are the relevant rules on contract workers in Brazil?

Companies can freely use the services of independent contractors, provided that choosing such an arrangement isn’t an attempt to avoid formal employment and the associated employees’ entitlement, such as social contribution, paid time-off, or 13th month salary. 

link to How to hire and pay independent contractors in Brazil
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How to hire and pay independent contractors in Brazil

Use this helpful guide designed for hiring managers and HR leaders to learn how to compliantly hire and pay independent contractors in Brazil

Can employers hire employees on fixed-term contracts in Brazil?

While employment laws in Brazil permit fixed-term employment contracts, the employer needs to justify why they’ve chosen such an agreement type. If a fixed-term contract runs its course, the employer is allowed to re-hire the worker on another fixed-term arrangement just once. Thereafter, an indefinite employment contract will be their only legally recognized option.

You can be found liable to pay fines and penalties for each misclassified employee. Furthermore, your contractor will be automatically reclassified as an employee. What’s more, your contractor will be entitled to claim back pay for any statutory rights they weren’t offered throughout their misclassification period. The federal tax revenue office might also apply an interest penalty for late payments.

The best way to avoid the consequences of misclassification is to work with a global employment provider who can classify your workers correctly. Remote’s team of employment experts has in-depth knowledge of local laws and can help you comply with labor rules in Brazil.

The fast, simple, compliant way to hire in Brazil

There are several ways to work with talent based in Brazil. Depending on your business goals, you can either set up a local legal entity, work with a reliable EOR or choose to work solely with independent contractors. Regardless of your choice, you have to make sure you stay legally compliant. As explained above, Brazil has complex employment laws that are tricky to navigate on your own.

The easiest and most compliant way to hire in Brazil is to partner with a global HR platform like Remote. Our experts will provide you with localized contracts that are compliant with Brazilian labor law. We’ll help you easily onboard new workers, both employees and contractors, as well as handle invoicing and payments. With Remote, you can rest assured that you’re compliant in all the markets you decide to hire in.

To give you a sense of how much it’s going to cost to hire an employee on a full-time contract in Brazil, check out our free Employee Cost CalculatorReferences:

Constitution of the Federative Republic of Brazil

Employment and Labor Law in Brazil

Termination of employment in Brazil

link to How to hire and pay remote workers in Brazil
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How to hire and pay remote workers in Brazil

This detailed, step-by-step guide walks you through the safest, simplest, and most scalable way to hire and pay remote workers in Brazil.

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