Salary Negotiation in Brazil
Salaries in Brazil vary greatly from one region to others. In this article, we will discuss the indicators that influence the value of wages in the country and how negotiations are taken regarding this subject.
Wages' indicators in Brazil
In Brazil, there’s basically three indicators that orient wages, aside from the market laws:
- The national minimum wage
- Piso salarial (wage level of each work category)
- Personal negotiations between companies and its employees
The national minimum wage (salário mínimo, in Portuguese) is the lowest salary an employer can legally pay to his employees for a full-time job. It is also the lowest price a person can legally sell his workforce. The national minimum salary is annually adjusted by the government, following the inflation rises, and exists as a way to ensure no worker will receive less than the wage stipulated for that year, which, by the way, is widely disrespected throughout the country.
For 2012, the national minimum salary was fixed in BRL 622, which is a very small value compared to Brazil’s cost of living. Just to give an idea, a recent study from Dieese (The Inter-union Department of Statistics and Socio-economic Studies) the minimum salary in Brazil should be BRL 2.617,33. This is commonly the salary that a just graduated earns in a capital city, for example.
There’s also the regional minimum salary, which follows the cost of living of each region. It’s negotiated by each state’s Legislative Assembly and passes through the governor’s approval. In São Paulo state, for example, the regional minimum salary was fixed in BRL 690, BRL 700 and BRL 710, depending on the region (capital or countryside).
Understanding the concept of Piso Salarial in Brazil
In a few words, piso salarial is the minimum wage to be paid to a determined professional category. It exists as a way to orient the workers towards negotiating their salaries and avoid abuses from companies.
This wage level is not established by the government like the national minimum salary. It can be determined in three ways:
- By an agreement through negotiations between the unions and the employers
- Through a collective agreement between a company and its workers (internal union)
- Through a ruling by the Labour Court
The supervision of the wage level is performed by the Ministry of Labour, through its inspectors. A worker who receives a wage below the established floor can bring a lawsuit before the Labour Court.
However, in Brazil, the piso salarial varies not only according to the profession, but also according to the region where the worker performs his activities. Actually, this is a very messy concept, and sometimes makes no sense because of the enormous differences that exist between regions and professions.
Not to mention that this minimum wage is widely disrespected and for some professions it’s not even considered. It all depends on the power of the unions and councils that negotiate with companies each category’s piso salarial.
Personal negotiations between companies and its employees
When it comes to determining salaries inside the companies it's important to say that large companies negotiate less. Each company has a way of negotiating, but small and medium companies usually have an easier time in meeting a requested salary increase, mainly because in large companies there are closed doors for career advancement and the flexibility for re-framing the employers is lower.
Larger companies
Larger companies normally negotiate the salaries of its employees with the internal union. Any company with hundreds or thousands of employees has some professional class association to discuss the workers’ interests with the management. When the expectations are not met, the employees will organize strikes. In Brazil, the sectors that most go on strikes are bank institutions, public institutions (education, transportation and bureaucratic agencies), and the heavy industry.
Smaller companies
In smaller companies, it is more common to see employees negotiating their salaries with their own superiors. Each person can do a particular calculation considering his workload, profession, his category’s piso salarial and his personal value to the company. And going from what he already receives, make a proposal for a salary readjustment.