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PEO & Employer of Record (EOR) in BrBrazil.

Population

203,062,512

Languages

1.

Portuguese

Country Capital

Brasília

Currency

Real (R$) (BRL)

G-P’s employer of record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.

Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.

As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.

Hiring in Brazil

The gross salary amount must be agreed with the candidate and paid in local currency. When negotiating terms of an employment contract and offer letter with an employee in Brazil, it may be useful to keep the following in mind:

  • Position of trust: A position of trust employee is a worker that is exempt from overtime as they are in senior strategic positions, empowered with managerial authority, or responsible for relevant projects representing the company’s interest before third parties. In the position of trust, salaries are typically about 40% higher than other employees and junior positions. Candidates for managerial positions are likely to understand that their position is exempt from control of hours and overtime pay, but it’s important to note this when negotiating the salary with a potential candidate.
  • Time control and overtime: Please note that employees hired in non-trust positions are obligated to register daily working time and are eligible for overtime payment.
  • Mandatory salary increases: Employees’ salaries automatically increase each year in accordance with rates negotiated by Unions, through the applicable Collective Bargaining Agreement, effective in August of every year. The annual adjustment is based on the inflation rate for the past 12 months.
  • Equal pay: Note that the principle of comparable pay applies in Brazil, whereby employees performing the same job function should have the same job title and equal pay.

Employment contracts and offer letter in Brazil

In Brazil, the best practice is to have written employment contracts in Portuguese, outlining compensation, benefits, and obligations.

An offer letter and employment contract should always state the salary and any compensation amounts in BRL rather than another currency. In Brazil, the employer is required to specify the main terms of the employment on the employee’s labor card. This information includes:

  • Name, address, and taxpayer number
  • Date of hiring
  • Duration of the contract, if temporary
  • Position, salary, and payment frequency
  • Holiday periods
  • Leave provisions

Probation period in Brazil

The maximum probationary period allowed in Brazil is 90 days. Usually, it is divided in 2 equal periods of 45 days. An employment contract may be terminated at the end of the probation period with a lower final pay, including salary of the period as well as untaken vacation pay and prorated 13th-month salary. A probationary period cannot be included in a fixed-term contract.

Non-compete clauses in Brazil

Non-compete clauses are not regulated by labor laws in Brazil and may not be fully accepted by labor courts, as a judge may view such a clause as a violation to the employee’s basic right to work.

However, it is possible to include a non-compete clause in the employment contract as long as it complies with the following:

  1. The restriction must be limited to a certain period of time (1 year maximum).
  2. The restriction must be strictly related to the activities performed by the employee and to the company’s business during the period of the employment contract.
  3. The geographic area restriction is limited to Brazil. Non-compete clauses are not valid for other countries.
  4. The employee must be compensated for the whole non-compete period, with at least the equivalent to their salary during the period of the employment contract.

Working hours in Brazil

In Brazil, the maximum weekly working hours is limited to 44 hours. Generally, a daily shift is 8 hours plus 1 hour of lunch (not included in the work shift).

The working hours limitation is set by the Labor Code. Please note that overtime is a major source of litigation in Brazil, so be attentive to the limitation.

Holidays in Brazil

There are several federal holidays in Brazil, including:

  • New Year’s Day
  • Tiradentes’ Day
  • Labor Day
  • Independence Day
  • Our Lady Aparecida
  • All Souls Day
  • Republic Proclamation Day
  • Christmas Day

Election days are also considered to be national holidays, and Brazil celebrates religious and ethnic holidays. Public holidays may be legislated at the federal, statewide, and municipal levels. Most holidays are observed nationwide, but each state and city may have its own holidays as well.

Vacation days in Brazil

Employees in Brazil are entitled to 30 calendar days of vacation per year after each 12 months of service. The accrued vacation can be granted in a single block or may be divided into up to 3 periods, provided that one period has a minimum of 14 days and others no less than 5 days each. In addition, the employee must be paid 1/3 of a month’s salary as a vacation bonus. Vacation pay and vacation bonus payments are due pro-rated upon termination in Brazil.

Brazil sick leave

If an employee is sick and provides a medical certificate, the first 15 calendar days of absence must be paid by the employer. Any further days off on continuation of the same sick leave or related to the same illness, limited to 60 days, are paid through the National Institute of Social Security (INSS) at fixed rates. Collective bargaining agreements may also provide additional compensation, if certain requirements are met and for a limited period of time.

Maternity/paternity leave in Brazil

  • Pregnant employees are entitled to 120 calendar days of maternity leave and may not be dismissed during pregnancy.
  • Salary and benefits must be paid throughout the employment protection period. This salary is covered by the social security system in Brazil (Instituto Nacional do Seguro Social or INSS).
  • Non-birthing parents are entitled to 5 calendar days of paid leave, which they must request in advance.

Health insurance in Brazil

Health insurance is provided by the government in Brazil, although private health insurance is an increasingly common employee benefit.

Most benefits in Brazil are prescribed by law and there are very few negotiating points on benefits with candidates. In addition to benefits described in other sections, there are heavy levies for various social charges that cover medical and other social welfare programs.

Brazil supplementary benefits

Local employees’ basic monthly benefits are mandatory and include a meal voucher, transportation voucher (for on-site work), and life insurance.

Pension plans in Brazil

Employers are required to contribute to a seniority payment/retirement savings fund known as Fundo de Garantia por Tempo de Serviço (FGTS). This is 8% of the remuneration paid in a special account (fund), which is released to the employee if they are terminated without cause.

In addition to the monthly contribution, in case of termination without cause, the company must pay a fine of 40% of all the amounts deposited during the length of the contract existing in the employee’s FGTS account on the termination date.

13th-month salary

A 13th-month salary is required in Brazil and is an amount equal to one month’s salary plus the average of commissions/bonuses received throughout the year. It is paid out to employees in 2 parts: the first installment is paid in November and the second installment in December. The pro-rated 13th-month salary is also due upon termination. The 13th-month payment is a legally mandated benefit and not part of the base salary. During negotiations with candidates, it is important to clearly state what salary is being offered and whether it is inclusive or exclusive of the 13th-month payment.

Termination/severance in Brazil

Either party may terminate the employment contract by giving written notice known as aviso prévio of 30 days or payment in lieu of working the notice period. After 1 year of service, the employee is entitled to 3 additional days’ notice per completed year of service until 60 days are added, making the total possible prior notice period equivalent to 90 days. However, only 30 days can be worked; the additional days must be compensated or indemnified.

The final payment to an employee that is terminated without cause must include all of the following:

  • Salary until the termination date
  • Pro-rated untaken vacation pay plus vacation bonus
  • Pro-rated 13th-month salary
  • Pro-rated for all bonuses, overtime, or benefits (if applicable) calculated up to the date of termination
  • FGTS penalty equivalent to 40% of the total of deposits made by the employer to the employee’s individual account

Union negotiations take place every year, during which mandatory salary increases and benefits are negotiated.

Transfer of employment

Transfers of employment are only legal as a result of a joint venture or acquisition in Brazil. So, it is not possible to transfer an employee, but the employment contract can be terminated, and a new one can be initiated with the following employer.

Why G-P?

At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading Global Growth Platform™. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.

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Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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