Civil law. The official currency is the Brazilian Real (BRL). The official language is Portuguese.

Last modified 13 Jun 2024

A foreign entity cannot hire employees in Brazil without a local corporate presence. Employers must pay social security contributions and labor charges on top of compensation, which represent an additional cost of approximately 65 percent in addition to salaries. Employees incur an income tax (up to 27.5 percent) and social security contributions (up to 11 percent of the compensation, subject to a legal cap) withheld at source from compensation.

Last modified 13 Jun 2024

Required

Immigration compliance, a valid ID and a pre-hire medical examination are required.

Permissible

Background checks for education, prior employment and basic personal information, such as proof of identity and residential address, are accepted in certain circumstances. Criminal checks are limited to certain circumstances.

Last modified 13 Jun 2024

Nationals of the Mercosul (ie, Argentina, Paraguay, Uruguay, Bolivia, Chile, Colombia, Ecuador and Peru) have the right to work in Brazil. For other non-Mercosul nationals, immigration permission is likely required.

Last modified 13 Jun 2024

Employee

Indefinite, fixed-term, full-time or part-time (intermittent).

Independent contractor

Independent contractors may be engaged directly by the company or through an entity. Engagement may be subject to misclassification exposure.

Agency worker

Agency workers are hired by temporary work agencies to render services to the temporary agencies' clients. Agency workers are entitled to various employment rights. 

Last modified 13 Jun 2024

Employment contracts

A written agreement is not legally required, but is common. Basic terms and conditions of employment are recorded in the employee's booklet (Carteira de Trabalho e Previdência Social or CTPS) and in other mandatory documents upon hiring.

The eSocial system allows the company to electronically perform all procedures related to hiring.  The Digital Employee’s Booklet now replaces the physical employee’s booklet (CTPS) so that, at the time of hiring, the employee only needs to inform the employer of their Individual Taxpayers' Registry number.

Companies are required to provide information related to final court decisions and settlements rendered by or made before the Labor Courts, in addition to settlements made within Previous Settlement Commissions (CCPs) and Inter-Union Centers (NINTERs), via the eSocial system.. The following information must be entered on the system: registry, contract, employment relationship, the basis for FGTS (Guarantee Fund for Length of Service), and social security contributions.

Probationary period 

Permissible. Statutory limit of 90 days.

Policies

Written employment health and safety policies such as an Occupational Health Medical Control Program (PCMSO) and an Environmental Risk Prevention Program (PPRA) are legally required.

Companies that are legally required to have a CIPA (Internal Commission to Prevent Health Issues and Accidents) must also provide trainings on the prevention of sexual and moral assaults in the workplace, every 12 months.

Third-party approval

The employment relationship with foreign employees must be submitted for the Secretary of Labor's approval.

Last modified 13 Jun 2024

Although not required by statute, all employment documents should be in Portuguese. 

Last modified 13 Jun 2024

Characteristics protected by statute from unlawful discrimination are gender, origin, race, color, marital status, family situation, age, pregnancy, religion and disability. Case law has also protected individuals of various sexual orientations and gender identities as well as individuals with severe illnesses from discriminatory termination.

Last modified 13 Jun 2024

Currently the legal protection of whistleblowers is limited to corruption cases. There is no legislation regarding whistleblower protections in the private sector. However, it is common for companies to adopt whistleblowing channels. The whistleblowing channel should assure the preservation of the whistleblower's anonymity throughout the process, and, although not a legal requirement, it should provide protection against retaliation.

Last modified 13 Jun 2024

All Brazilian employees must be enrolled with the Brazilian Social Security System, which provides for pension and disability benefits as well as public health coverage.

Employees must be granted transportation vouchers and benefits set out in collective bargaining agreements. The granting of meal vouchers and a private health plan is common.

Last modified 13 Jun 2024

The new General Data Protection Law (Lei Geral de Proteção de Dados or LGPD) came into force on September 18, 2021. The LGPD is Brazil´s first comprehensive data protection regulation and applies to any processing operation carried out by a natural person or a legal entity, of public or private law, irrespective of the means used for the processing, the country in which its headquarters are located or the country where the data is located, provided that:

• The processing operation is carried out in Brazil
• The purpose of the processing activity is aimed at the offering or provision of goods or services, or at the processing of data of individuals located in Brazil, or
• The personal data was collected in Brazil.  

The LGPD does not contain specific employment provisions, but its provisions cover employment data.

The monitoring of corporate email and internet use is allowed, but employees should be notified that they cannot expect privacy in the use of these work tools.

Last modified 13 Jun 2024

There is no obligation to notify the government before asset or share deals. There are significant restrictions on changing terms and conditions of employment.

Last modified 13 Jun 2024

Union representation is mandatory, and all employees are subject to industrywide collective agreements. Works councils are uncommon. However, Law 13,467, which became effective on November 13, 2017, provides for a commission of employees for companies whose workforce exceeds 200 individuals. The number of commission employees will depend on the size of the workforce, ranging from 3 to 7 members.

Last modified 13 Jun 2024

Grounds

As a rule, termination does not require a cause, but severance payments for terminations without cause are higher than those owed in cases of termination for cause. Certain circumstances protect employees against unmotivated dismissal. Termination by mutual agreement is allowed in certain circumstances when it is convenient for the company as well as for the employee.

Employees subject to termination laws

All employees are subject to termination laws.

Restricted or prohibited terminations

Certain circumstances prevent the termination of the employment relationship without cause or cause an increase in the severance payments, such as:

• Pregnancy
• Application by the employee for, or election of the employee to, a position at the Internal Commission for Accident Prevention (Comissão Interna de Prevenção de Acidentes or CIPA)
• Application by the employee or election of the employee for a management position at the employees' union
• Work accident (an employee who suffers a work-related accident cannot be dismissed until 1 year after the illness allowance has ceased) and
• Acceptance by the employee of a position in the conciliation commission in charge of settling labor disputes.

Other events provided under collective conventions or collective agreements may lead to temporary job tenure protection.

Third-party approval for termination

The union may be required to participate in the termination process of employees in circumstances preventing termination per collective bargaining rules.

Since November 13, 2017, the union – or the labor authority – is no longer required to ratify terminations of employees; however, collective bargaining agreements may provide that ratification is mandatory for certain sectors.

Mass layoff rules

Mass layoffs do not require prior negotiation with the union, however under Supreme Court case law, unions must be involved in the termination process. However, union authorization is not required in order to move forward with the terminations.

Notice

Termination without cause by employer's initiative: 30 days during the 1st year plus 3 days per additional year of service for the same company, limited to 90 days. Additional collective bargaining agreement provisions may apply.

Termination for cause: Not applicable, effective immediately.

Statutory right to pay in lieu of notice or garden leave

The company has the statutory right to pay in lieu of notice. Garden leave is not allowed.

Severance

In case of termination without cause, the employee is entitled to severance, amounting to the equivalent of 40 percent of the balance in the employee's Unemployment Guarantee Fund (Fundo de Garantia por Tempo de Serviço or FGTS), accrued during the employment relationship. Additional payments will be due, such as 1 month's salary if the termination takes place in the 30 days before the expected date of the collective bargaining agreement for the following period; payout of accrued vacation plus 1/3 vacation bonus; pro-rated 13 months' pay; and other payments required by the applicable collective bargaining agreement or contract.

In case of termination with cause, accrued unused vacation plus vacation bonus and other payments required by the applicable collective bargaining agreement or contract are still required, but there will be no FGTS payout or additional 1 month's salary.

In case of termination by mutual agreement, the company must pay half of the notice and 20 percent of the FGTS balance, as opposed to 40 percent when the termination is on the company's initiative. The employee will be allowed to withdraw 80 percent of the balance of the FGTS fund, as opposed to 100 percent when the termination is on the company's initiative, but they are not entitled to unemployment benefits in this type of termination.

Last modified 13 Jun 2024

Brazilian law does not address post-termination restraints. Therefore, enforcement of post-termination restraints may be challenging.

Non-competes

Periods of up to 24 months have been accepted, but enforceability is more likely for shorter periods (ie, 6-12 months). Case law has upheld non-competes that were limited with regards to scope, territory, timeframe and fair and reasonable payment.

Customer non-solicits

Generally permissible.

Employee non-solicits

Generally permissible, but case law is scarce in this regard.

Last modified 13 Jun 2024

Not enforceable unless in a settlement ratified at court.

Last modified 13 Jun 2024

Discrimination

Indemnification based on the claimant's damages in case of a labor lawsuit, plus a recommendation that the employer takes action.

The law 13,467 establishes parameters that must be observed by the judges when determining the indemnification for moral damages. According to this law, the maximum indemnity amount cannot exceed 50 times the amount paid by the social security system benefits to the worker. However, recent case law has fixed amounts above this limit as certain labor judges consider the limit for moral indemnifications unconstitutional.

Unfair dismissal

Severance in case of termination without cause in which the employee is not protected by job tenure is set out in law. In case of termination without cause, employees protected by job tenure can trigger damages and reinstatement.

Failure to inform & consult

As a rule, there is no obligation to inform and consult the union about terminations, unless so required by a collective bargaining agreement. In such cases, failure to inform triggers the consequences set out in the collective bargaining agreement.

Failure to inform and consult in mass terminations may trigger reinstatement orders and financial consequences.

Last modified 13 Jun 2024

Violation of employment laws and discrimination can trigger criminal sanctions.

Last modified 13 Jun 2024