Andréa Novais

Andréa Novais


The Brazil Business

Updated

Brazilian Employment Law in a Nutshell

Andréa Novais

Andréa Novais


The Brazil Business

Updated

Foreigners often refer to Brazil as a country with very strict labor laws and too many benefits for its employees. Learn more about the Brazilian labor laws and its reflections on the behavior of the Brazilian professional.

It is no secret that hiring in Brazil is not cheap. Costs with health insurance, meal, transportation, contribution to the social security department and other taxes paid to the government significantly increase the cost of an employee in Brazil. What is not mentioned as often is that it has not always been like this.

The Brazilian consolidation of labor laws (Consolidação das Leis do Trabalho or simply CLT) is the major legislation norm regularizing labor activities in the country. It was created in 1943 and approved by president Getúlio Vargas.

Employment schemes

The Brazilian constitution considers employee every person providing services to an employer on a regular basis, depending on this employer and receiving a salary.

The Brazilian labor laws recognizes six type of employment schemes:

Celetista

It is the Portuguese word for employees working under the CLT regulation. It is the employee who has a CTPS (carteira de trabalho e previdência social), a book where all information about salary, employer, job description and others are recorded. It is considered to be the formal employment scheme.

Interns and trainees

The term intern refers to students registered on private or public educational institutions (high school, technical or higher education) and taking a part time job. These students can only work up to six hours a day and their job routine must be related to the course they are taking.

Inters do not work under CLT regime, so with the exception of paid vacations and transportation, they have no other rights. It is often a good option for companies, as interns can reduce costs with staff in 50%.

Trainees are professionals who have recently graduated. They work under the CLT regime and are usually hired to take executive positions, such as managers. As they need to be prepared for the job, they are trained for the position they are going to take. They are also cheaper than a more experienced professional.

Trabalhador cooperado

Corresponds to the worker associated to a cooperative. Once the worker joins the cooperative, he is not considered to be CLT, as cooperatives have their own statute. It means that there is employment scheme among the members of a cooperative, even though many of them work more like employees than as partners.

Self-employed

A self-employed person is a worker that performs his job without having an employment relation as an intermediate. SEBRAE defines a self-employed person as private person that provides services to one or more companies, without employment relations.

It means that the service being provided is sporadic, there is no hierarchical subordination and there is no monthly salary. As a self-employed person provides services at his own costs and risks, without fixed working hours or subordination, he has no rights to regular benefits, such as paid vacations, 13th salary, meal or transportation.

Legally speaking, self-employed professionals are supposed to work as legal entities, as they are expected to pay the taxes related to the services they provide, but in most cases, they rather work as mere free-lancers, as this way they would get rid of taxes.

Domestic employee

Domestic employees are those providing domestic services to an individual or a household. In most cases, they used to be contracted unofficially, with no legal registration. Since 2006, the profession was regulated by Law 11.324/2006 and now, with the exception of FGTS, fixed working hours, unemployment insurance and benefits in case of accidents at work, they are entitled to all other benefits that regular CLT employees are given, such as paid vacations, 13th salary and maternity leave.

From interview to an effective employee

In Brazil, it is normal to interview from five to ten candidates before effectively hiring one of them. In order to avoid this kind of headache, Você SA magazine has prepared some steps that can be followed when interviewing a Brazilian candidate and we have made a list based on these steps:

  • Describe the opportunity properly. This will avoid engineers showing up when what you needed was a bricklayer.

  • Visualize the ideal candidate. This way, you will be able to recognize him when he is right in front of you.

  • Read the entire résumé. This way, you will have a better idea if the candidate really suits your needs.

  • Make a list of specific questions regarding the job opportunity you are offering, having in mind all the things you need to know about this candidate.

  • Ask open questions. It does not work to ask indirect or ambiguous questions. Avoid questions that could be answered with a simple “yes” or “no”. Give the candidate the opportunity to talk more about himself and to describe his abilities.

  • Present hypothetical situations related to the job routine.

  • Make sure that you clarify all aspects of his résumé, such as the description of his abilities.

  • Have in mind that while you are interviewing, you are also being evaluated by the candidate as you represent his first contact with your company.

  • Make it clear what the next steps are once the interview is over. Let your candidate know if he is supposed to wait for a call, for how long, if he should keep track of his e-mails, etc. Be aware that Brazilian candidates make complaints online when a company does not reply them after an interview and this can damage your company’s image.

In Brazil, you can hire an employee in a trial regime for 45 days and if you wish to, you can renew the trial for other 45 days. If you decide to fire your employee within these 90 days, you do not need to pay him usual benefits and he will have no right to unemployment insurance.

Employee’s rights

As mentioned in our article Common Benefits in Brazil, Brazilian employees are used to several benefits and in many cases these benefits define whether he is staying with your company or looking for another job.

Here are the rights guaranteed by law in Brazil:

Established working hours

According to article 7º, XIII of the Federal Constitution, working hours in Brazil should not exceed 44 hours a week and preferentially, 8 hours a day. In this case, the employee would have to work 4 hours on Saturday, so what happens in many companies is that employees would work extra 48 min every day in order to take Saturday off.

Depending on the job, there are conventions between companies and Unions, and then employees will work more than 8 hours a day. That’s the case for nurses, guards and other professionals whose job is essential to society.

Despite legal determinations, establishing that working hours cannot exceed 44 hours a week and overtime cannot surpass 2 hours a day, is not uncommon to hear of people who work 10, 12, 14 or even 16 hours a day. Supervision is not very strict when it comes to this and in some cases, workers choose to accept such working conditions and then sue the company once they are gone.

Paid vacations

Every employee working under the CLT regulation has the right of a 30-day rest every 12 months of work. If by the time an employee is dismissed he has not taken his vacations, then the employer is obliged to pay him 1/3 extra of the total vacations value.

13th salary

The 13th salary is a gratification equivalent to a month salary and paid in two installments. In Brazil, it is paid in November and December. It is the equivalent to Christmas bonus in countries like Germany, Argentina and Portugal.

FGTS – Fundo de garantia por tempo de service

As previously explained in our article Dismissing in Brazil, every month, 20% of the employee’s salary is deducted by FGTS. This percentage is split between the employee and the employer and varies according to the salary. The percentage paid by the employee goes from 8% (for those who earn up to BRL 1.106,90) to 11% (for those who earn from BRL 1.106,91 to BRL 3.689,66). Those who earn more than BRL 3.689,66 pay a fixed amount of BRL 405, 86. The rest is undertaken by the employer.

Aviso prévio

Aviso prévio is a notification that must be given by both employee and employer when they are no longer willing to work together. This notification must be given one month prior to the dismissal.

What happens in many companies is a practice called “aviso indenizado”, meaning that the company would rather pay the employee extra 30 days of work without having him as an employee anymore than having him working for 30 days, aware that he is going to be fired.

This measure is adopted because employees who are aware that will be fired within 30 days can cause several problems to the company and be a negative influence among other workers. By law, the employee who quits should also reimburse the company for his leave, but this is rarely charged by employers.

Leave

The Federal Constitution establishes that pregnant women can take off 120 days of leave. Also, with the exception of those working on trial period, they cannot be fired once the pregnancy has been found out and five months after the baby was born. Fathers have the right of taking five days off when their kids are born as well.

Transportation and meals

Brazilian employers are obliged to cover its employees’ transportation costs and provide a meal for those working 8 hours a day. But just like it happens with working hours, supervision is not very efficient as well and many companies do not offer any meal for its employees, and in some cases, the space provided for them to prepare/heat their meals is precarious.

I will sue you!

As previously mentioned in this article, Brazilians love to sue their employers. It is a cultural behavior, a way to make “easy money”. Aware of that, many companies decide to operate illegally and wait to see if the employee is going to sue them or not. In many cases, this practice is a lot cheaper than working under proper regulation.

Brazil is said to be the country with the higher number of labor claims in the world. In 2010, this number was of almost 3 million claims. Specialists point out that one of the major reasons why there are so many labor claims going on in Brazil is that the Brazilian law is outdated and protects the employee.

Also, the Brazilian regulation is so extensive and confusing that it is hard to keep up with all the requirements. Employers must be very careful about their work policy or employees will definitely find a reason to sue them (and will probably win).

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