BrazilEmployer of Record
COVID-19 status update
As the situation in the Brazil continues to develop, Safeguard Global will be providing in-country intellect to our clients. As of today, we have not identified any disruption that will impact our ability to provide the service our clients expect. Learn more in our COVID-19 Resource Center.
If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Brazil, an employer of record may be the best option for achieving your global growth objectives.
An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Brazil―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.
Learn about the hiring, employment, payroll and benefits requirements for workers in Brazil and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.
Hiring in Brazil
Employment in Brazil is governed by a number of regulations, beginning with the federal constitution and the 1943 Consolidation of Labor Laws and amendments. Other statutes and collective bargaining agreements also come into play.
Brazil’s employment laws generally favor employees. Employers regularly face litigation from former employees after they are terminated.
Since employment in Brazil is highly regulated, compliant employment contracts are an essential business need. As your employer of record and PEO in Brazil, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.
Employment contracts in Brazil
As you look to hire employees in Brazil, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.
Normal work hours are eight per day and 44 per week unless a collective bargaining agreement specifies otherwise. The workday can be extended to 12 hours with an employee’s written consent or by a collective bargaining agreement. Two hours of overtime work per day are allowed.
For every six hours an employee works continuously they are entitled to a one-hour break.
Typically, employees are given Sunday off, but they are entitled to at least one day off with pay.
As you consider the appropriate salary to offer new employees, keep in mind:
- Minimum wage is 1,045 reals per month.
- Collective agreements may regulate the legal salary range.
- If the government raises the minimum wage, an employer is not obligated to pay existing employees the higher rate.
- Brazil’s states are able to set and enforce a higher minimum wage than the national minimum.
- Overtime is at least 50% more than base pay and must be paid for any time outside of eight hours per day or 44 hours per week.
As your employer of record in Brazil, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.
Employees are entitled to an annual bonus, paid at the end of the year, that is equal to one month’s salary. This is payable in two installments, the first due between February 1 and November 30, and the second by December 20.
A probation period of up to 90 days, which may be renewed, is permitted.
Termination and severance
Employees can be dismissed with or without cause. If it is with cause, there is no advance notice requirement, although an employee who disputes the cause may sue the employer in labor court.
If termination without cause, the employer must give eight days’ notice (for employees paid weekly) or at least 30 days’ notice (for employees paid less frequently or who have worked for the employer for a year or more). Three days must be added for each year of service up to a maximum of 90 days total. If no notice is given, the employer must pay the employee for the duration of the required notice period.
During the notice period, employees may take two hours off each day with pay. Employees paid weekly can take off one full day with pay and employees paid less often and with one year or more of seniority may take seven full days off with pay.
If an employee is terminated without cause, the employer must add to the employee’s pension, called the Guaranteed Fund for Length of Service account, a fine of 40% of the total amount accumulated in the Guaranteed Fund during the employee’s length of employment. They are also entitled to be paid for unused vacation and must be given all back pay as well as a pro-rated amount of the annual bonus based on the number of months the employee worked that year.
Several types of employees cannot be terminated:
- Union representatives, candidates for representative or a representative whose term expired within the last year
- Pregnant employees, until five months after birth
- Employees absent from work due to a work-related accident until one year after they have been released to go back to work
As your employer of record in Brazil, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.
Employee benefits and paid leave in Brazil
When negotiating terms of an employment contract with a candidate in Brazil, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.
Pregnant employees are entitled to four months of paid maternity leave that may begin up to one month before the due date. It can be extended by two weeks before or after the birth in the event of a medical situation. Maternity leave pay is equal to the employee’s full salary, or an average of the last six months of wages. It is paid by the employer, who is reimbursed by the social security system.
Employees who have worked for 12 months are entitled to up to 30 days of paid vacation per year. The number of days depends on how many unexcused absences the employee had during the year:
- Five or fewer unexcused absences: 30 days
- Six to 14 absences: 24 days
- 15 to 23 absences: 18 days
- 24 to 32 absences: 12 days
- 32-plus absences: None
Vacation pay must be at least one-third higher than the employee’s regular salary.
Employees may take their vacation within 12 months of earning it. If they are not permitted to, they are entitled to double their regular wages when they do take it.
An employee may elect to receive compensation in lieu of up to one-third of vacation days. Unused annual leave cannot be carried over to the following year. Vacation time can be split into three periods if the employee agrees. One of them must be for at least 14 consecutive days and the remaining two periods can be no less than five consecutive days.
Employees are entitled to eight national holidays as well as election days, which are considered public holidays and are held on the first and last Sundays in October:
- New Year’s Day
- Labor Day
- Independence Day
- Our Lady of Aparecida Day
- All Souls Day
- Proclamation of the Republic Day
- Christmas Day
Additionally, Brazil recognizes optional holidays and partial holidays:
- Ash Wednesday
- Good Friday
- Corpus Christi
- Public Service Day
- Christmas Eve (after 2 p.m.)
- New Year’s Eve (after 2 p.m.)
Employees may also be entitled to local holidays.
When national holidays fall on a Sunday, the following Monday is taken off. Employees who must work on a holiday are entitled to double pay.
Employees who miss work because of injury or illness not related to work are entitled to their regular salary for the first 15 days. If they are absent longer than that, the social security system pays sick leave. Workers may be required to have medical exams. Employees who receive sick leave pay from social security cannot be fired for up to one year after they return to work.
Healthcare in Brazil is fully funded by the government for all citizens and residents. Almost 25% of Brazilians purchase private health insurance in order to avoid long waits. Many employers choose to offer private health insurance as a benefit.
As your employer of record in Brazil, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.
The retirement age is 65 for men and 60 for women. To qualify for benefits, male employees must have made contributions to the social security system for at least 35 years, and women for at least 30. Both employers and employees contribute.
The Guaranteed Fund for Length of Service is an account that provides workers with an annuity upon retirement (or termination without cause). All employees hired after May 10, 1988, as well as any employees who did not have 10 years of service with their employer by 1988, have a Guaranteed Fund account. Employers make monthly contributions on behalf of their employees.
Withdrawals from the Guaranteed Fund can be made to buy real estate, pay for healthcare in severe medical cases or in case of a natural disaster.
Employers are required to contribute to a labor accident insurance fund that is administered by the Ministry of Social Security. Employees (or their beneficiaries) receive compensation for job-related injuries, disability or death.
Employers are also required to offer the following benefits:
- Meal vouchers
- Transportation vouchers
- Life insurance at a standard rate for a family of three
Additionally, employers frequently offer the following perks:
- Dental insurance
- Private medical insurance
- Tuition assistance
Employer social costs will cover a large portion of employee benefits in Brazil, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.
Employee onboarding with an employer of record in Brazil
We write and validate all local employment contracts, streamlining the onboarding process for you and your employees in Brazil—all you have to do is provide relevant information and review and approve the employment agreement.
As your employer of record in Brazil, we will:
- Schedule a welcome call to discuss HR and employment information for Brazil, as well as answer any questions
- Prepare a customized employment contract in English and in Portuguese (or other local language)
- Share the employment contract and benefits information with the new employee for signature and review
- Gather tax and banking information from the employee to set up payroll
- Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll
The entire onboarding process for the employee is often completed in as little as two weeks.
Partner with Safeguard Global as your Brazil employer of record and PEO
With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.
We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Brazil. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.
Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.
Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
Learn more about Global Employment Outsourcing
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