5 January 2024

Employment Law In Brazil: A Guide

Biz Latin Hub Group


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If you are doing business in Brazil, or planning to enter the market, understanding and navigating Brazilian employment law will be essential to maintaining your good reputation with local authorities...
Brazil Employment and HR
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If you are doing business in Brazil, or planning to enter the market, understanding and navigating Brazilian employment law will be essential to maintaining your good reputation with local authorities, while also maximizing your chances of success in Latin America's largest economy.

Employment law in Brazil is similar in many ways to laws found in other regional markets, however it also has its own peculiarities to navigate. That means you will want to secure the services of reliable corporate legal counsel in Brazil with a history of helping investors do business in the market.

For anyone intending a shorter-term operation, or who only needs a limited number of employees, hiring via a professional employer organization (PEO) in Brazil can be a good option — with the service allowing you to avoid company formation and liquidation, as well as guaranteeing compliance with local employment law.


A quick guide to employment law in Brazil is provided below, including standard working hours, the most common types of contracts you will be giving to employees, leave allowances for different circumstances, and statutory contributions for both employees and employers.

If you are interested in understanding more about how we can help you navigate employment law in Brazil, as well as many other aspects of doing business in the country, contact us today.

Standard hours set out by Brazilian employment law

According to employment law in Brazil, a standard working day is eight hours long, while a working week should be no longer 44 hours, with a working month totally 220 hours.

Overtime hours are allowed, however they should be limited to two hours per day.

There are 12 national holidays in Brazil over the course of a calendar year, while the country's 26 states have a few of their own holidays.

Employment law in Brazil: main contract types

There are four main types of contract that are used in Brazil, which are used based on the nature of the job someone is hired for.

  1. Indefinite-term employment contract
    This is the most common type of contract used in Brazil, under which no set period of work is established. Under the terms of such a contract, should the employer terminate the contract, the employee is entitled to receive an indemnification payment equal to one month of salary.
  2. Definite-term employment contract
    A definite-term contract can last for up to two years and is applicable under the following conditions:
    1. The nature of the service justifies the predetermination of the period of employment
    2. The business activity is of a temporary or transitory nature
    3. For probation agreements (this to the maximum of 90 days, after which the agreement is converted into Indefinite Term)

Note that for these contracts an indemnified notice may apply, usually amounting to the equivalent to half of the remaining period.

  1. Temporary employment contract
    A temporary employment contract can only be used for particular types of work or roles that warrant them. Examples include seasonal work or cover for maternity leave or other types of extended leave periods. It will usually be allowed for a maximum of 180 days and can be extended for a further 90 days.
  1. Intermittent employment contract
    Under the terms of this contract the employee is hired and paid on an hourly basis and can be called upon based on the necessities of the employer. As such, there is no fixed salary. The activities must be determined in hours, days, or months. The employee can work for other companies at the same time.


Vacations, leave, and other absences under Brazilian law

After 12 months of working for the same company, employees are entitled to 30 days of leave over the following year. That allowance may be split into up to three separate vacation periods, which must be agreed with the employer. According to employment law in Brazil, one of those vacation periods must last for at least 14 consecutive calendar days, while any others must last at least 5 calendar days. The employer must pay the employee's salary plus an additional amount equivalent to one third of the salary as a benefit for the leave period.

Sick leave
Employers are obliged to pay up to 14 days of sick leave as long as the employee has received authorization from a registered doctor. After that period, authorized sick leave will be paid by theNational Institute for Social Security(INSS) agency for up to two years.


Maternity and paternity leave
In Brazil, maternity leave totals four months, or 120 days (paid by the INSS), which can be extended to 180 days, under discretion of the employer and subject to tax deductions. Paternity leave totals 5 days, but may be extended to up to 20 days (under discretion of the employer).

Employment law in Brazil allows for paid bereavement leave in the event of the death of an employee's parent, sibling, spouse, or child. Bereavement leave in each case totals 2 days.

Marriage leave
Under Brazilian employment law, an employee is entitled to three days of paid leave when they get married.

Blood donation
Employees are entitled to take one day of paid leave every 12 months in order to donate blood but must provide evidence of having made the donation.

Statutory contributions under Brazilian employment law

Employee deductions
Income tax deductions vary from 0% TO 27.5% based on salary. Social security deductions similarly vary from 7.5% to 14%, limited to R$876.97 per month.

Employer contributions
Under employment law in Brazil, employers must make two monthly contributions:

1. An amount between 26.7% and 31.8% of the employee's salary to the INSS.

2. An amount of 8% of the employee's salary to the government compensation fund (FGTS).

Under certain circumstances, the employer is also required to provide transport and meal allowances, while for some jobs employees are entitled to have certain benefits covered, such as health and life insurance.

Frequently Asked Questions about Labor Laws in Brazil

In our experience, these are the common questions and doubtful points of our Clients.

1. What are the labor laws in Brazil?

Brazil's labor statutes delineate a standard workday of 8 hours and a weekly range of 44 to 48 hours, providing flexibility through both fixed-term and indefinite employment contracts. The nation has set a definitive national minimum wage, and employees enjoy the benefit of annual paid leave.

2. What are the working conditions in Brazil?

Working conditions in Brazil are established by the Federal Constitution, Brazilian labor legislation, and UCBAs (Union Collective Bargain Agreements). These regulations ensure that the working day for most employees does not exceed 8 hours. Additionally, workers are entitled to overtime if they work more than 44 hours in a week, and set out any additional benefits that must be offered.

3. How many hours are in a standard workday in Brazil?

The standard workday in Brazil typically starts at 8:00 a.m. or 9 a.m. and ends at 5:00 p.m. or 6 p.m. There is a one-hour unpaid break for lunch. In total, the weekly working hours range from 40 to 44, with 8 hours per day for five days a week and an additional 4 hours for those who work on Saturdays. Alternatively, the 4 hours that would be worked on a Saturday can be compensated by the inclusion of 18 minutes per day to the 5 sweekdays.

4. What is the minimum salary in Brazil?

The current minimum wage in Brazil is 1320 BRL/Month (265.92 USD/Month) as of July 2023. The amount is usually updated on a yearly basis.

5. How is overtime paid in Brazil?

Overtime pay must be at 150% of their usual pay or 200% on holidays and weekends, and is also subject to different percentages agreed in a UCBA.

6. What are the laws regarding employment termination in Brazil?

Under Brazilian law, the termination must be notified in writing with at least 30 days in advance (prior notice).
When the agreement is terminated by the employer with no cause, the employer can choose whether to pay an amount equivalent to one salary for the indemnified notice or ask the employee to work during this period. If the employee resigns and does not comply with the prior notice, the amount of one salary may be deducted from the termination payments.

The employer must pay the employee any outstanding salary and holiday allowances, including vacation pay, thirteenth salary, and other payments due a proportion of their annual bonus, based on how much of the year they have worked. And a termination without cause also implies in a penalty equal to 40% of the total amounts deposited into the employees indemnity fund (FGTS) during their period of employment.

Only in the event of wrongdoing, misconduct, or a change in circumstances that make the employee unable to carry out the role they were contracted for, as laid out in Article 482 of Decree Law 5.452/43 can the employer terminate the contract with cause. In the case of termination with cause, the prior notice and penalty over FGTS deposits are is not due.

7. What are the requirements for terminating an employee in Brazil?

To terminate an employee in Brazil without cause, the requirements are as follows:

– Give a notice period of at least 30 days
– Increase the notice period by three days per year of employment, up to a maximum of 90 days
– Pay severance
– Notify the employee in writing, signed, and dated
– Register the termination in the employee's employment booklet
– Inform the relevant authorities

Termination with cause will be done with immediate effect (no prior notice required), as long as all actions for proper register and configuration of the cause for termination have been ensured.

Additionally, certain categories of employees have additional protection against dismissal.

8. What happens when an employee quits in Brazil?

When an employee quits in Brazil, they are required to give a notice period of 30 days. Unlike in other countries, there is no additional requirement of 3 days per year of service. Upon resignation, employees are entitled to their accrued benefits, with the exception of the FGTS (there is no 40% penalty for the employer to pay) and unemployment funds.

Biz Latin Hub can assist you doing business in Brazil

At Biz Latin Hub, our multilingual team of business support specialists is available to assist you launching and operating in Brazil. We have a comprehensive portfolio of back office solutions, including company formation, accounting & taxation, and hiring & PEO, meaning we can provide a tailored package of integrated services to suit every need.

Whether you need help navigating employment law in Brazil, or doing business there or in any of the other 17 markets in Latin America and the Caribbean where we provide services, contact us now to discuss how we can support you.

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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.

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