Employment Law in Brazil: a Guide

If you are doing business in Brazil, or planning to enter the market, understanding and navigating Brazilian employment law will be essential to maintaining your good reputation with local authorities, while also maximizing your chances of success in Latin America’s largest economy.

A map of Brazil and some key cities

Employment law in Brazil is similar in many ways to laws found in other regional markets, however it also has its own idiosyncrasies to navigate. That means you will want to secure the services of reliable corporate legal counsel in Brazil with a history of helping investors do business in the market.

For anyone intending a shorter-term operation, or who only needs a limited number of employees, hiring via a professional employer organization (PEO) in Brazil can be a good option — with the service allowing you to avoid company formation and liquidation, as well as guaranteeing compliance with local employment law.

A quick guide to employment law in Brazil is provided below, including standard working hours, the most common types of contracts you will be giving to employees, leave allowances for different circumstances, and statutory contributions for both employees and employers.

If you are interested in understanding more about how we can help you navigate employment law in Brazil, as well as many other aspects of doing business in the country, contact us today.

Standard hours set out by Brazilian employment law

According to employment law in Brazil, a standard working day is eight hours long, while a working week should be no longer 44 hours, with a working month totally 220 hours. 

Overtime hours are allowed, however they should be limited to two hours per day. 

There are 12 national holidays in Brazil over the course of a calendar year, while the country’s 26 states have a number of their own holidays.

Employment law in Brazil: main contract types

There are four main types of contract that are used in Brazil, which are used based on the nature of the job someone is hired for.

  1. Indefinite-term employment contract
    This is the most common type of contract used in Brazil, under which no set period of work is established. Under the terms of such a contract, should the employer terminate the contract, the employee is entitled to receive an indemnification payment equal to one month of salary.
  2. Definite-term employment contract
    A definite-term contract can last for up to two years and is applicable under the following conditions:
    1. The nature of the service justifies the predetermination of the period of employment
    2. The business activity is of a temporary or transitory nature
    3. For probation agreements

Note that when such a contract ends, the employer does not need to pay for indemnified notice

  1. Temporary employment contract
    A temporary employment contract can only be used for particular types of work or roles that warrant them. Examples include seasonal work or cover for maternity leave or other types of extended leave periods.
  1. Intermittent employment contract
    An intermittent contract is provided for work that involves an irregular and ad-hoc working schedule, and for which the employee is paid on an hourly basis according to the needs of the employer. As such, an intermittent contract does not include a fixed salary.
Brazil labor laws: There are four main types of employment contract in Brazil.

Vacations, leave, and other absences under Brazilian law

After 12 months of working for the same company, employees are entitled to 30 days of leave over the following year. That allowance may be split into up to three separate vacation periods, which must be agreed with the employer. According to employment law in Brazil, one of those vacation periods must last for at least 14 consecutive calendar days, while any others must last at least five calendar days. Such leave is paid at an elevated rate equal to the normal salary, plus one third of the salary.

Sick leave
Employers are obliged to pay up to 14 days of sick leave as long as the employee has received authorization from a registered doctor. After that period, authorized sick leave will be paid by the National Institute for Social Security (INSS) agency for up to two years. 

Brazil labor laws: besides maternity and sick leave,employees in Brazil also receive leave for marriage

Maternity and paternity leave
In Brazil, maternity leave totals four months, or 120 days, which can be extended to 180 days, and is paid by the INSS. Paternity leave totals five days, but may be extended to up to 20 days.

Employment law in Brazil allows for paid bereavement leave in the event of the death of an employee’s parent, sibling, spouse, or child. Bereavement leave in each case totals two days. 

Marriage leave
Under Brazilian employment law, an employee is entitled to three days of paid leave when they get married.

Blood donation
Employees are entitled to take one day of paid leave every 12 months in order to donate blood, but must provide evidence of having made the donation.

Statutory contributions under Brazilian employment law

Employee deductions
Income tax deductions vary from 0% TO 27.5% based on salary, with the highest band being any salary above approximately $885 per month. Social security deductions similarly vary from 7.5% to 14%.

Employer contributions
Under employment law in Brazil, employers must make a contribution to the INSS that equals 26.8% of an employee’s salary, as well as a further 8% towards the government’s indemnity fund.

Under certain circumstances, the employer is also required to provide transport and meal allowances, while for some jobs employees are entitled to have certain benefits covered, such as health and life insurance.

Frequently Asked Questions about Labor Laws in Brazil

In our experience, these are the common questions and doubtful points of our Clients.

1. What are the labor laws in Brazil?

Employees in Brazil are entitled to overtime pay if they work more than 40 hours in a five-day workweek or 44 hours in a six-day workweek. Overtime pay must be at 150% of their usual pay or 200% on holidays and weekends. Additionally, there is a limit of two hours of overtime per day for employees.

2. What are the working conditions in Brazil?

Working conditions in Brazil are established by the Federal Constitution, Brazilian labor legislation, and CBAs. These regulations ensure that the working day for most employees does not exceed 8 hours. Additionally, workers are entitled to overtime if they work more than 44 hours in a week.

3. How many hours are in a standard work day in Brazil?

The standard work day in Brazil typically starts at 8:00 a.m. or 9 a.m. and ends at 5:00 p.m. or 6 p.m. There is a one-hour unpaid break for lunch. In total, the weekly working hours range from 40 to 44, with 8 hours per day for five days a week and an additional 4 hours for those who work on Saturdays.

4. What is the minimum salary in Brazil?

The minimum wage in Brazil is 1320 BRL/Month (265.92 USD/Month) as of July 2023. The maximum rate of minimum wage for employees is 1100 BRL/Month and the minimum is 64.79 BRL/Month.

5. How is overtime paid in Brazil?

Overtime compensation in Brazil is calculated at 1.5 times the employee’s salary for working beyond the standard working hours stated on the employment agreement, which is typically either 40 or 44 hours weekly.

6. What are the laws regarding employment termination in Brazil?

Employment termination in Brazil follows an at-will policy, allowing employers to terminate employees without cause as long as they adhere to notice periods and provide severance pay. However, if an employer chooses to terminate an employee without fulfilling these requirements, they must have a valid reason for the termination.

7. What are the requirements for terminating an employee in Brazil?

To terminate an employee in Brazil, the requirements are as follows:

– Give a notice period of at least 30 days
– Increase the notice period by three days per year, up to a maximum of 90 days
– Pay severance
– Notify the employee in writing, signed, and dated
– Register the termination in the employee’s employment booklet
– Inform the relevant authorities

If you terminate an employee without following these requirements, you need to have just cause for the termination. Additionally, certain categories of employees have additional protection against dismissal.

8. What happens when an employee quits in Brazil?

When an employee quits in Brazil, they are required to give a notice period of 30 days. Unlike in other countries, there is no additional requirement of 3 days per year of service. Upon resignation, employees are entitled to their accrued benefits, with the exception of the FGTS (there is no 40% penalty for the employer to pay) and unemployment funds.

Biz Latin Hub can assist you doing business in Brazil

At Biz Latin Hub, our multilingual team of business support specialists is available to assist you launching and operating in Brazil. We have a comprehensive portfolio of back office solutions, including company formation, accounting & taxation, and hiring & PEO, meaning we can provide a tailored package of integrated services to suit every need.

Whether you need help navigating employment law in Brazil, or doing business there or in any of the other 17 markets in Latin America and the Caribbean where we provide services, contact us now to discuss how we can support you.

Or learn about our team and expert authors.

Brazil labor laws: A quick guide to labor laws created by Biz Latin Hub

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