HR Solutions & Employee Relations in Brazil with IRIS  

IRIS HR consulting has experience helping businesses grow in Brazil. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can help your business hire, recruit, and pay staff overseas in new, unfamiliar countries, such as Brazil. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.  

Take your business to Brazil with IRIS HR Consulting.

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    Global expansion in Brazil

    Brazil is quickly becoming an economic stronghold in the Americas. As the largest country by land mass and population, which largely speaks in Portuguese, Brazil recovered faster than anticipated after the 2008 global depression and has since prospered as a desirable business destination.  

    Approximately just under half of its population is comprised of a young, up-and-coming generation of workers with diverse expertise and knowledge. Outside of its promising workforce, Brazil enjoys a strong industrial sector, with great potential in solar energy, agricultural goods, and iron, ore and oil.  

    Brazil is the leading player of several trade agreements, such as the Mercosur, the Free Trade Area of the Americas and the Group of 20. Alongside these existing trade partnerships, the quick recovery from the 2008 crash led to interest from cross-border investors and foreign businesses, which has since inspired new trade.  

    Establishing your business in Brazil 

    Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.  

    Before entering the Brazilian market, you will need to honour labour regulations, which have developed over the years. Establishing a business in Brazil will require local knowledge – everything from establishing your operation based on location, to understanding the ‘employees’ market’.  

    Complying with these procedures can be easier when you partner with IRIS HR consultants – we can help you reach Brazilian markets.  


    Brazilian Employment laws  

    When first expanding your business into Brazil, navigating local laws, legislation and rules of employment is no mean feat, especially if you’re unfamiliar with the country’s strict labour focused policies. Throughout the world map, these laws are almost never universal. Rather, employment is dynamic and reflects the country’s social, economic, and cultural opportunities.  

    For example, employment in Brazil is mainly governed by Consolidacao das Leis do Trabalho (CLT) in conjunction with the Federal Constitution of 1988.  

    Additionally, every employee must be tax registered and there are six different employee categories. The most common being a Celetista employee, which has a written and signed CTPS (a contract or book) with their employer. The only other employment category that is unique to Brazilian labour codes is the Trabalhador Cooperado. This is used to describe a cooperative or partner of an employer.  

    Did you know?

    Brazil makes up one of the BRIC countries along with Russia, India, and China. Their fast-growing economies are predicted to compete with the USA in global economic importance in the near future.  

    HR in Brasilia

    Employment rights & contracts in Brazil    

    A contract of employment in Brazil must be verbally negotiated with the candidate before a contract and offer letter is completed.    

    A ‘position of trust’ salary should be established according to the demands of the role and is expected to be set at 40% higher than junior employees. These workers are also exempt from overtime, but this should be made clear in the initial negotiations. For any employees not in a position of trust, the principle of comparable pay applies where employees doing the same job function should have the same title and pay.  

    It’s important to note that all Brazilian employees are part of a union and salary increases happen centrally annually. 

    All contracts must be written in Portuguese and any monetary compensation should be put into Brazilian Real.  

    Hiring & recruitment in Brazil     

    When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer and thereafter – including before, during and after the commencement of an employment contract. 

    Brazilian visas and work permits

    As the largest country in South America, Brazil is a vibrant hub for international trade and employment. Workers will need both a residence permit and a work visa. Like other territories, there are different work visas in Brazil, including:

    • Permanent work visa (called Visto Permanente)
    • VITEM V visa
    • VITEM II visa, or for foreign business trip

    What are the working hours in Brazil?  

    The legal work week in Brazil is up to 44 hours. Typically, this will equate to eight hours per day from Monday to Friday, and then a further four hours on Saturday (for the non-managerial and non-executive workforce). The work week is set centrally by the Government. Employers discovered in breach of this statutory law may face litigation, as courts tend to favour the employee.  

    Overtime in Brazil 

    A minimum renumeration rate of 1.5x against an employee’s salary is required during the working week (from Monday to Saturday) for any overtime that is completed.  

    If overtime is requested on a Sunday, then this requires a special permit and pay at 100% against the regular rate. This can be changed by a Collective Bargaining Agreement, which are common in Brazil. 

    Overtime in Brazil 

    A minimum renumeration rate of 1.5x against an employee’s salary is required during the working week (from Monday to Saturday) for any overtime that is completed.  

    If overtime is requested on a Sunday, then this requires a special permit and pay at 100% against the regular rate. This can be changed by a Collective Bargaining Agreement, which are common in Brazil. 

    Sick Leave in Brazil 

    Upon presentation of a valid sick certificate, the first 15 days of absence must be paid by the employer. Anything further is covered by the Instituto Nacional do Seguro Social (INSS) at a fixed rate.  

    Maternity Leave in Brazil 

    Pregnant employees are entitled to 120 days of maternity leave and may not be dismissed during pregnancy. Salary and benefits must be paid in full during the protected period.  

    Paternal leave 

    Men are entitled to five days of paid paternity leave, which must be requested in advance and advised through their employer.  

    Public Holidays in Brazil 

    Brazil celebrates 12 public holidays, including: 

    • New Year’s Day 
    • Carnival (Feb. 15-16) 
    • Good Friday 
    • Easter Sunday 
    • Tiradentes’ Day 
    • Labor Day / May Day 
    • Corpus Christi 
    • Independence Day 
    • Our Lady Aparecida/Children’s Day 
    • All Souls Day 
    • Republic Proclamation Day 
    • Christmas Day 

    Election days are also considered national holidays. There are other religious and ethnic holidays, however these can vary at the federal, state and municipal levels.  

    Vacation  

    After 12 months of service, employees in Brazil are entitled to 30 calendar days of holiday. Typically, this is divided into two periods of 20 and 10 days, then further divided as follows:  

    • A two-week period  
    • two one-week periods 

    Additionally, the employee must be paid a third of a month’s salary as a holiday bonus. These are due pro-rata upon termination. 

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    End of Service 

    HR in Brazil requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.  

    For these more complicated matters, you will need expert HR guidance to navigate Brazilian labour laws and remain compliant.  

    HR in Rio de Janeiro

    Termination (including Severance) in Brazil 

    The conclusion of a contract in Brazil comes with a host of legislation. Either party may end the contract through written notice or payment in lieu of working the notice period. After a year of employment, the notice period increases by three days annually, up to a maximum of 60 days.  

    There is a final payment due to the employee which must include normal pay, pro rata untaken holiday pay, a 13th salary, and all bonuses, overtime and benefits up until the employee’s final day. This can vary depending on numerous factors, meaning employing a HR professional to help navigate this time-sensitive period is key.  

    Termination of employment means the employer will have to pay a premium to the FGTS (Fundo de Garantia por Tempo de Serviço) up to 40% for dismissal without cause and 20% for dismissal with cause. There are 12 reasons for termination with a reasonable cause, which include:  

    • Performing a dishonest act 
    • Performance on behalf of the business without prior permission 
    • Criminal conviction 
    • Violation of company secrets 
    • Insubordination 
    • Abandoning the position 
    • Defaming the reputation of a person during work hours 
    • Physical violence 

    Social Security (INSS) Coverage  

    Social security contributions, or the INSS, is where the employee contributes between 8% and 11% of their salary toward social security. There is a cap to the individual contribution, which represents 11% applied upon the maximum contribution income.  

    Employers contribute between 26.8% and 28.8%, of which 8.8% is ringfenced to other social security taxes; and unlike employees, there is no contribution cap.  


    Supplemental benefits

    Health Insurance  

    While Brazil has a central government health service, private medical insurance is becoming an increasingly common benefit. 

    Life Insurance  

    One of the mandated benefits by the Brazilian government, life insurance must be included at a standard rate for a family of three.  

    Mandated benefits 

    Employers are required to provide meal vouchers and transportation vouchers as a reasonable supplemental employee benefit. Additionally, under some Collective Bargaining Agreements, there may also be a requirement to provide life insurance to employees. 

    There is also a mandated 13th month payment, or Christmas Bonus, that must be included in initial negotiations, as it forms part of the employee’s gross salary. 

    Employment in Brazil.

    Why Partner With IRIS?

    When entering aspiring countries like Brazil, you will need an employment specialist to navigate parts of Brazilian employment laws. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.  

    Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Brazil.  

    Our cost-effective, knowledgeable approach to HR in Brazil makes us an ideal partner to commence your overseas plans.