With a mixture of emerging and booming economies, political uncertainty and extreme contrasts in business customs, the Americas can never be categorized as one homogeneous whole.
The Brazilian business environment is complex and requires companies to have a clear understanding of the local rules and regulations. Here we take a look at how HR & Payroll works in Brazil.
Social Security System
- Companies are required to pay 20% of employees' gross salaries to finance the Brazilian Social Security System (INSS)
- Other social security charges are levied on employers, depending on the company's activities, up to a maximum of 8.8% of payroll.
- Employees also pay 8%-11% of their monthly salaries towards social security, which is withheld by the employer.
- Employment contracts in Brazil may be verbal or written. The contract must state the remuneration of the employee.
- Every employee must have a Work Booklet (CTPS), which contains terms of the employment contract.
- An employer who dismisses an employee
without cause must give the employee prior notice of a minimum of
30 days and provide:
- balance of wages;
- 13th salary (additional month's salary paid at the end of the year);
- Government Severance Indemnity Fund for Employees (FTGS) deposits with a 50% fine on the accumulated amount;
- and unused earned vacations as well as additional vacations.
Foreign Personnel & Work Permits
- Brazilian companies with more than three employees are required by law to employ at least two Brazilians for each expatriate employee.
- Foreign workers must hold a valid work permit (temporary or permanent) to live and work in Brazil. They must also have a local ID card (RNE Card), a tax ID (CPF), and a CTPS.
- Employers must apply to the Ministry
of Labour to obtain work permits for their foreign employees. The
different types of work permits are:
- Temporary Visa V, Without a Labour Contract: for workers of foreign companies engaged in a service contract with a Brazilian company
- Temporary Visa V, With a Labour Contract: for workers employed by a Brazilian company
- Permanent Visa: for workers employed by a Brazilian company in management positions (directors, managers).Compliance with additional requirements set by the National Immigration Council is required.
- Business visas for short-term visitors are valid for up to five years, permit multiple re-entries, and limit individual stays to 90 days and total stay in a year to 180 days.
- Salaries are payable at least once a month.
- Compensation for overtime is payable at a minimum of 50% above the compensation for normal working hours and is paid on a monthly basis.
- Bonuses and profit sharing are generally paid annually, in cash.
- The minimum monthly wage specified by the government is BRL 880
HR Legislation & Worker Benefits
- Labour relations in Brazil are governed by the Brazilian Labour Code (CLT).
- Another body that enforces labor regulations in Brazil is The Ministry of Labour and Employment (MTE).
- Employers contribute 8% of employees' gross salaries to the Government Severance Indemnity Fund for Employees (FTGS). Upon termination of employment, an employee is entitled to the funds accumulated in it.
- Men and women can retire at any age after contributing to the social security system for 35 and 30 years, respectively, to receive a full pension or for 15 years to receive a partial pension. The retirement rules are currently under discussion by the government.
- Employees are entitled to 15 sick days; payment of additional days is made by INSS.
- Employees are entitled to 30 days of paid vacation, following 12 months of work, which can be availed in the subsequent year.
- Employees are entitled to a 13th salary, an additional month's salary, paid at the end of the year, generally in two installments.
- Female employees are entitled to 180 days of maternity leave; men are provided with 5 days of paternity leave. The rules regarding paternity leave is currently under discussion by the government.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.