Key Labor Laws in Brazil

Labor Laws in Brazil

Brazil is one of the top ten most influential emerging economies for doing business. Nevertheless, if you want to hire local talent, you must consider the next four key labor laws in Brazil.

Hiring Laws

In Brazil, when hiring a new employee or dismiss him/her, it is a must to inform this process to the General Register of Employed and Unemployed —Cadastro Geral de Empregados e Desempregados (CAGED). Also, employees must be enrolled in the Social Integration Program —Programa de Integração Social (PIS). It is required to report all the information related to payroll, taxes, and other labor ancillary obligations in the digital bookkeeping system known as eSocial.

Benefits to hire employees in Brazil

The main employee benefits in Brazil are:

• Workers are entitled to take 30 days of paid vacation after 12 months of work.
• Get an additional holiday pay equivalent to 1/3 of their monthly salary.
• Receive a proportional Christmas Bonus or 13th salary (one-month salary which is paid in two parts: 50% in November and 50% in December).
• Employers must provide a transport and meal subsidy for their employees.
• Access to the Federal Severance Pay Fund (FGTS), where employers make monthly contributions corresponding to 8% of their employee’s compensation.

Working Hours in Brazil

Employees should work a maximum of 8 hours per day, from Monday to Friday, and 4 hours on Saturdays, not more than 44 hours per week. For overtime hours, employees are allowed to work only two extra hours —which must be paid with an extra wage of at least 50% from Monday to Saturday, and 100% on holidays and Sundays.

Workers and Employees

Workers, as well as employers, have the freedom to associate in unions, which offer protection to their rights and responsibilities. Non-compliance with unions conditions can lead to heavy fines. Comprehending all labor laws in Brazil is a real challenge. That’s why you should consider to partner with an International PEO to obtain expert advice on how to better manage your workforce in compliance with local laws.