Brazil

Brazil’s economy is the 9th largest in the world with an estimated worth of natural resources being US$ 21.8 trillion. The country’s diverse and open economy has developed flourishing trade relationships with more than 100 different countries. According to the 2017 Index of Economic Freedom, the total foreign direct investment in Brazil was $64.6 billion. The Brazilian government promotes foreign investment in scientific and technological infrastructure. Brazil’s moderate climate, excellent infrastructure, supportive government and wealth of natural resources make it a highly favored destination for foreign investment.

Overview

Currency:Brazilian Real (R$)

Principal language: Portuguese

Government: Federal Constitutional Republic

Capital City: Brasília

Major Cities: El Salvador, Rio de Janeiro

Employment Contracts

Under Brazilian law, employment contracts need to be in writing only for professional artists, professional athletes and apprentices. An employment relationship through written contract, tacit agreement or oral promise is also legally valid. A tacit employment agreement is often based on the parties' behavior when there is no formal employment agreement. When there is no specific termination date, an employment agreement is expected to be valid for an indefinite period. Employers may hire employees with probationary terms that are treated as fixed-term contracts with a maximum period of 90 days.

Work/Time Regulations

The federal constitution establishes “normal working hours” of 8 daily and 44 for every week, unless stated otherwise as part of a collective bargaining agreement. It may be mandatory for employees to work a maximum of 2 overtime hours every day. In an emergency, there may be a need for additional overtime if a specific agreement registered with the Ministry of Labor and Employment.

Workers get the right to 11 hours off in between 2 working days. For every unbroken work period lasting 6 hours in a workday, employers need to provide a 1 hour break for rest or a meal. Employers that fail to allow this rest break must compensate workers with a premium of 50% additional wages for the hour that should have been a break

Employees get 1 day paid off each week, usually Sunday unless the Ministry of Labor and Employment has given special approval on an employer's request for work on Sunday. Underage employees cannot work in night shifts.

Overtime Rules
Continuous work hours for more than 8 per day and 44 per week are deemed overtime, unless recommended otherwise in a collective bargaining agreement. Compensation for overtime must be a minimum 50% more than compensation for normal working hours. Employees get the right to double pay for work on holidays and Sundays. The entitlement to overtime pay is not applicable in the case of part-time employees.

Employees can be made to work a maximum of 2 overtime hours a day as the legal limit to the workday is 10 hours. However, the law considers a few exceptional circumstances valid for additional overtime.

Leave

Holidays

Employees are entitled to 8 national holidays:

  • Jan. 1: New Year's Day
  • April 21: Tiradentes
  • May 1: Labor Day
  • Sept. 7: Independence Day
  • Oct. 12: Our Lady of Aparecida Day
  • Nov. 2: All Souls Day
  • Nov. 15: Proclamation of the Republic Day
  • Dec. 25: Christmas

Brazil also identifies some optional holidays and optional partial holidays, which are:

  • Carnival (the 2 days prior to Ash Wednesday)
  • Ash Wednesday (44 days prior to Good Friday)
  • Good Friday (2 days before Easter)
  • Corpus Christi (on a Thursday about 2 months after Easter)
  • Oct. 28: Public Service Day (date finalized according to the ordinance Ministry of Planning)
  • Dec. 24 after 2 p.m.: Christmas Eve
  • Dec. 31 after 2 p.m.: New Year's Eve

Based on the place of work of employees, they may also get local holidays. If a national holiday falls on a Sunday, employees can take an off on the following Monday.

Annual Leave
Employers need to provide paid annual vacation to employees for up to 30 days, but the exact number of days will be based on the number of unexcused absences that can be attributed to a worker, as follows:

  • Number of days of paid vacation for five or lesser unexcused absences: 30 days
  • Number of days of paid vacation for 6 to 14 absences: 24 days
  • Number of days of paid vacation for 15 to 23 absences: 18 days
  • Number of days of paid vacation for 24 to 32 absences: 12 days
  • Number of days of paid vacation for more than 32 absences: None

Vacation pay need to be at least one-third more than the employee's usual salary. Generally, the vacation need to be taken in one period. Employers need to allow workers to avail their vacation within 12 months of their eligibility or the employers must double their regular pay when employees do take it. An employee may choose to take cash payment in lieu of up to one-third of total days of vacation.

Maternity Leave
Female employees are entitled to get maternity leave for up to 4 months (120 days), including up to a month prior to the due date. This leave can be extended by 2 weeks before or after childbirth based on the medical condition of the mother or child.

Employers need to pay the employee's last complete salary (or the average of the last 6 months of salary in case of variable pay) as maternity pay — but the same gets reimbursed by the social security system later.

Upon notifying the employer about pregnancy, a female employee cannot be terminated without cause until 5 months after delivery. New mothers are entitled to go on 2 half-hour breaks every day to breast-feed until the child has is 6 months of age.

Paternity Leave
Fathers can take 5 days of paid paternity leave, and employers cannot discriminate against them for doing so.

Sick Leave
Employees who must stay away from work due to of a non-work-related injury or sickness are entitled to get their regular salary for the first 15 days they do not come to work. If they remain absent longer than that, Social Security will pay the sick leave.

Workers who receive sick leave benefits from social security may need to undergo periodic medical examinations and, if they are unable to perform their jobs, participate in vocational rehabilitation as part of their training for a new job. Workers that received sick leave social security benefits cannot be fired for up to 1 year after their return to regular work.

Other Leave
Employees are entitled to 3 days of paid leave for their marriage and 2 days of paid bereavement leave if a spouse, parent, child or sibling or any other dependent passes away.

Benefits

In Brazil, a comprehensive Social Security system is run by its National Institute of Social Security (the Instituto Nacional do Seguro Social or INSS) under the Ministry of Social Welfare. The system manages contributions to provide for workers' compensation, pensions, education funds, unemployment insurance, and other welfare provisions. Both employees and employers need to make social security contributions, which vary based on industry type and workplace risk.

Social security also grants benefits in the following areas: survivor pensions, aid for dependents of people who are incarcerated, savings funds, benefits for the elderly and those with disabilities, professional rehabilitation assistance, work accident payments, maternity leave payments, family salary support, and accident insurance and sick leave benefits. The legal age of retirement is 65 for men and 60 for women. To qualify for benefits, male employees need to have completed contributions for at least 35 years, women for a minimum of 30 years.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Brazil and hire their employees without having to establish a branch office or subsidiary in Brazil.

  • Your candidate is hired via our Brazil PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Brazil laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 100+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and managements. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcounts.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Lean more about our end-to-end international expansion services.