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7 Things to Consider Before Hiring in Brazil

Co-Founder
The Brazil Business

Updated

22 September 2016

This article gives an overview of the hiring process in Brazil, including related costs and legal aspects

Background

It is very common to hear foreign business owners saying that the workforce in Brazil is very expensive. This is true, but not because Brazilian people make a lot of money, but because there are many other costs related to hiring and employment.

Issued in 1943, the Consolidation of Labour laws, known as CLT regulated labour relations, with the creation of an established workday and resting hours. Since its creation, employers must follow its denominations when hiring employees.

However, the expenses involved in the hiring process are not only those established by the Consolidation of Labour Laws. There are also the benefits that are expected by the employee and that will definitely contribute to which job they are going to choose, such as health care or day care assistance.

1. Usual working week

According to Brazilian law, individuals cannot work more than 44 hours per week and the ideal is that an individual would work 8 hours per day, from Monday to Friday, in addition they would work 4 hours on Saturdays. Many companies do not require their employees to work on Saturdays, so the workday would exceed the 8 hours.

Some occupations allow employees to work only 6 hours a day. This is the case of telephone operators and receptionists.

2. Benefits

Many Brazilians tend to accept working for a minimum salary as long as the company provides benefits. The benefits vary according to the company and to the employee's occupation.

For example, companies that concentrate a high percentage of women, such as call centers, will focus on benefits such as daycare and cesta básica de alimentos; yet companies with a significant number of interns and students will focus on scholarships.

The most common benefits are:

Cesta básica de alimentos - which is a box with foods that are considered standard to the Brazilian diet, such as rice, beans, sugar, coffee, pasta and so forth. Lately, there has been a trend of giving the employees a certain amount of money instead of the box with food, so that they can choose what is relevant to their diet
Health care: most companies offer health care to the employees and many times this benefit can be extended to children and spouse
Day care assistance: the employer pays the daycare or at least part of it for parents who have young children. Some companies also pay part of the tuition for employees who are willing to attend a course that is relevant to their occupancy in the company
Life insurance: despite being optional, life insurance as a benefit is much more common than health care

3. Transportation and Meals

Since 1987, employers are obliged by law to provide their employees with transportation to and from work. Transportation is paid only when the employee actually goes to work, so absences are not covered.

Employees who work 44 hours per week are usually provided one meal. Employers may pay its employees an amount corresponding to the price of a regular meal compatible to the prices practiced where the office is located or provide an in-company restaurant, where employees can have their meals.

Even though companies may choose not to have an in-company restaurant, those with more than 30 employees must at the least have a proper place where employees can have their meals.

4. Parental Leave

Pregnant women have the right to take maternity leave. Officially, this leave is four months. During these four months, she will still receive a monthly salary, paid by the social security. In 2010, the government approved a law that allows companies to grant mothers an additional 60 days paid leave which can be fully deducted from the corporate income tax (IRPJ). To be allowed to offer this benefit to employees, the company has to be registered with the Federal Revenue Service in a special programme called Programa Empresa Cidadã.

Men also have the right to take leave when their child is born. This leave is five days and must be communicated in advance. They will also get paid for absent days.

5. 13th Salary

A Christmas bonus, 13th Salary is practiced in different countries, such as Brazil, Germany and Portugal. In Brazil, it corresponds to one months salary and it is paid in two portions, one in November and the other in December.

It was instituted by law in 1965 and constitutes an obligation for every and each employer.

6. Paid Vacation

Every employee has the right to take 30 days off after 12 months of work. This is established by law and the employer gets to decide when the vacation will be taken.

Family members who work together have the right to take their vacations together, as long as it does not affect the company.

7. Payroll Costs

It is common to hear that in Brazil your employee costs the double of their salary. This is due to the fact that there are several charges involved in the hiring process.

Every month, employers are charged at least 68.18% on each employee's payroll. For example, an employee who is paid BRL 900 per month actually costs BRL1 512. And this sum does not include transportation, meals and the benefits many employers offer to their employees. With this in mind, it is possible to say that an employee costs even more than the double their salary.