Global Expansion Resources | Brazil
Brazil Employment Contracts
Helping business expand into Brazil with our specialist PEO services
Stay compliant with Brazilian employment laws and issue lawful Brazilian employment contracts using our expert PEO services
With the 8th largest economy in the world, Brazil is an attractive prospect for companies seeking international expansion. But hiring employees in Brazil can be a difficult affair, requiring the negotiation of Brazil’s strict labour laws to produce compliant employment contracts and ensure adequate support for workers.
Establishing your business presence in a foreign country can be daunting. Fortunately, our experts at Leap29 can help. We ensure your international expansion is compliant at every step of the process, from initial set-up, to hiring and employment contracts.
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Brazil Expansion Advice
Overview of Brazilian Employment Contracts
A written agreement of employment is not legally required in Brazil, although it is common practice for many companies. As this is the case, the ‘Prevalence of Facts’ is sometimes necessary to determine whether or not someone is currently in employment. The facts and actions of individuals and companies often take precedence over the physical documentation.
Some of the markers of an employer-employee relationship are as follows:
- Rendering services to a company on a permanent basis
- Dependency on the company for compensation
- Position/inability to appoint others
- Lack of control over work procedures and hours of work
The Consolidação das Leis do Trabalho (CLT) regulates areas of employment within Brazil. Employment rights typically favour employees over the employer, and employment contracts should reflect this to remain compliant. Brazilian labour laws enforce generous vacation periods, mandatory 13th salaries, and strict work limits (without paying overtime).
Labour legislation also aims to protect workers in the event their employment contracts are terminated. Protections against unfair dismissal and termination without cause ensure that workers are fairly compensated for any wrongdoing on behalf of the employer. Penalties are common for misclassification as labour claims are free of charge, and if the Ministry of Labour rules in an employees’ favour, the company can be fined BRL 400,000 per employee (double in the case of a relapse).
Types of Brazilian Employment Contracts
There are three main types of employment contracts available in Brazil:
- Indefinite Term Contracts (Contrato por Tempo Indeterminado)
- Fixed-Term Contracts (Contrato por Tempo Determinado)
- Intermittent Work Contracts (Contrato de Trabalho Intermitente)
Indefinite Term Contracts are the most common type of employment agreements in Brazil. They allow long-term employment with no specific end date, providing stability for employees and employers alike.
Used for temporary projects such as construction works, Fixed-Term Contracts have an end date specified in the contract agreement. A contract cannot exceed two years in length, although extensions are available if the existing contract is shorter to bring it up to maximum time.
Labour law reforms have introduced Intermittent Work Contracts for exceptional episodic work on a temporary basis, allowing for periods of inactivity between tasks. The maximum period between work cannot exceed three months.
Can I make changes to an Employment Contract?
In Brazilian law, it is forbidden to make changes to the terms and conditions of employment unless the changes are more favourable to the employee.
Do I need to translate an Employment Contract?
Employment contracts can be written in a dual-language format, but must include a Portuguese version of the document. Any contract to be fulfilled in Brazil is translated by an approved state-level translator. In the event of an issue or legal dispute, the Portuguese version of the document takes precedence over another language.
How do I write a Brazilian Employment Contract?
For clarity and protection purposes, an employment contract in Brazil must provide the following information:
- Employer and employee identification
- Salary, benefits, and pension fund
- Contract start date (and expiry date if applicable)
- Working hours, leave schemes & termination agreements
- Location of work
- Probation period
- Employee duties (e.g. non-disclosure agreements)
- Company policies and practices (e.g. use of equipment)
- Conditions for travel/relocation for business purposes
- Compensation duties for employer damages
- Any other fixed terms
The basic terms and conditions of employment are recorded either electronically via the eSocial system (Digital Employee’s Booklet) or in the physical Work Permit and Social Security Card document (Carteira de Trabalho e Previdência Social) after being hired. An employee contract signed by the employer must be delivered to the new employee within 48 hours of starting their new job.
Why use a PEO partner to manage Brazilian Employment Contracts?
Creating, maintaining, and amending compliant contracts is often a time-consuming, risk-laden process. Failing to comply with Brazilian law can result in hefty fines and cause delays. By partnering with a trusted PEO company such as Leap29, you can ensure your international expansion runs smoothly.
We can handle the difficult aspects of your expansion, managing payroll, taxation, national insurance, entity set up, recruitment, work permits and visas. Our expert team can streamline your expansion with world-class support, so you can focus on growing your business internationally, hassle-free.
If you are interested in learning more about how our Brazilian PEO services can benefit your business expansion, contact us today on +44 (0) 20 8129 6860 or email [email protected] to get started.
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