Guide to Brazil Employment Law

Investors starting a company and hiring employees in Brazil must be aware of and fully comply with Brazil’s employment law.  

The Brazilian economy is experiencing recovery, and economic forecasts are positive. Last year, the government passed an important pension reform to manage its national budget more efficiently. In addition, an ambitious tax reform that could simplify the Brazilian complex tax system is on the radar. All of this is set to contribute to boosting the economy, and although long-term results of the applied reform are yet to be known, the economy has shown signs of greater recovery than in previous years. In fact, the IMF has updated its forecast for Brazil’s GDP growth to 2.2% for 2020 – above the regional average.

With a more positive economic outlook, entering and operating a business in Brazil is an attractive option. Investors seeking to incorporate a company and hire employees must be aware of Brazil employment law so as to avoid unnecessary hurdles in business operations and comply with fiscal duties.

Brazil employment law: know the Labor Code

Labor laws in Brazil are grouped in the Consolidation of Labor Laws (Consolidação das Leis do Trabalho, CLT). CLT were amended in 2017 through Law N. 13467 in 2017. This amendment made labor duties and regulations for employers more flexible. Changes implemented reached key points such as vacations, rest and mealtimes, workload, lawsuits and more.

Minimum Wage

Labor legislation law books in a shelf
Labor laws in Brazil are grouped in the Consolidation of Labor Laws (Consolidação das Leis do Trabalho, CLT)

According to Brazil employment law, the minimun wage in Brazil must adapt to inflation, hence, it is adjusted yearly. The minimum wage in Brazil is generally the same through the Brazilian territory, however, 5 states have their own wage floor and will not change it during this year. The current, general 2020 minimum wage is R$1039 (US$247).

Note that president Jair Bolsonaro has stated that this amount will increase to R$1045 (US$248.36) in February of this year. However, this is yet to become official.

For clarity purposes, we list the 5 jurisdictions with different wage floors. 

StateMinimum wage range, depending on type of work
ParanáR$1,383.80 to R$1,599.40 (US$328.87 to US$380.1)
Rio de JaneiroR$1,238.11 to R$3,158.96 (US$1238.11 to US$750.74)
Rio Grande do SulR$1,237.15 to R$1567.81 (US$293.98 to US$372.6)
Santa CatarinaR$1,158 to R$1,325 (US$275.2 to US$314.88)
São PauloR$1,163.55 to R$1,183.33 (US$276.51 to US$281.21)

Employing foreign workers

Employees in Brazil working in accordance to Brazil employment law
Companies must ensure that two-thirds of its workforce are Brazilian nationals, and the company must justify the need for hiring foreign employees.

To hire foreign employees in Brazil, the employing company must apply for a work permit from the General Immigration Coordination (Coordenação-Geral de Imigração, CGI). 

Parallel with the company’s request for the permit, the hired person has 90 days from the day of entry to Brazil to register for the social security programs PIS/PASEP and for an Individual Taxpayer Number (CPF/MF) and submit these registrations to CGI.

Like most countries, Brazil has a ratio that limits the number of foreign employees per company. Companies must ensure that two-thirds of its workforce are Brazilian nationals, and the company must justify the need for hiring foreign employees.

Benefits to workers in accordance with Brazil employment law

According to Brazil employment law, employees are entitled to diverse benefits:

  • Bonus Salary: Employees in Brazil are entitled to a bonus payment, known as the 13th salary. This amount is equivalent to a month’s salary and is paid at the end of the year. 
  • Vacations: After an employee completes a year of work, they are entitled to 30 days of paid vacations, which can be consecutive or split. However, vacation days cannot be less than 10 days.
  • Guarantee Fund for Length of Service (FGTS):  This is an energy deposit of 8% of the employee’s gross salary that are a reserve for emergency situations.
  • National Institute of Social Security (INSS): Employers must over the total salary amount a contribution from 8% to 26.7%.
  • Transportation Voucher: Payment destined for transport expenses of employees.  The company can deduct up to 6% of the employee’s salary for this expense.
  • Maternity leave: Female workers are entitled to 120 days of paid leave after giving birth. The employer bears this cost initially, but it is later reimbursed by the National Social Security.


Employment contracts in Brazil can be classified into 3 categories: fixed-term, indefinite term and intermittent.

1. Fixed-term contracts

Brazil contracts
There are 3 different categories of contracts: fixed-term, indefinite term and intermittent.

A fixed-term contract validity depends on work completion or the performance of a service. According to Brazil employment law, there are three types of fixed-term contracts: standard contract, experience contract, and apprenticeship contract. 

A standard contract’s validity cannot exceed 2 years and all CLT rights must be provided to employees. The second type of fixed-term contracts, the experience contract, has the purpose of providing experience to employees and cannot exceed 90 days. Finally, the apprenticeship contract – a contract for hiring young people aged 14 to 24 years) cannot exceed 2 years. 

2. Indefinite-term contracts

Contracts for an indefinite period are the most common type of contracts registered. This type of contract doesn’t have an end date set, and employees are entitled to all the rights established by the Brazil employment law. Also, employees benefit from rights if the employer chooses to terminate their contract. 

3. Intermittent contracts

The intermittent employment contract was created in the 2017 Brazil employment law amendment. This type of contract governs work commitments valid during certain periods of time. Under these contracts, employers require and call for employee services only at specified times, which means that employees have periods of inactivity when not required by the employer.

Working Hours

After the last amendment to the CLT,  a working day limit is 12 hours a day followed by 36 hours of rest. In addition, a working week can’t exceed 44 hours and overtime cannot be more than 2 hours a day.

Hire employees in accordance with Brazil labor law through Biz Latin Hub

Brazil’s reforms are set to impact the economy positively in the coming years. In addition, the country’s vast domestic market, strong industries and links to the rest of the Americas support the country’s economic plans. Investors seeking to enter the country and hire employees must comply with Brazil employment laws so as to avoid unnecessary hurdles in fiscal compliance and business operations. 

At Biz Latin Hub, we help investors from all over the world enter the Brazilian market. Our team of local and expatriate lawyers and accountants have vast experience in hiring personnel, PEO services, company incorporation, visa services and more. Contact us now for more information and personalized assistance.

Learn more about our team and expert authors and check our video about reasons to do business in Brazil!

6 Phenomenal Reasons to Do Business in Brazil

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