Going Global in Brazil!

by Fisher Phillips

[author: Alice Wang]

Brazilian Basics

As a leading and influential economy in Latin America (and the world), Brazil is an attractive country for employers and employees. Among Brazil’s positive attributes are its rich and warm culture, amazing sites, trendy fashion, and great food! Brazil’s vast and vibrant economy sources include natural resources and raw materials, solar energy and other forms of alternative energy, tourism, manufacturing of numerous consumer products, agricultural goods, and environmental science services and technology. Indeed, Brazil led in the creation of Mercosur, the Free Trade Area of the Americas (FTAA), and he Group of 20 (G-20) coalition that represents developing country interests in the Doha Development Round of the World Trade Organization (WTO) negotiations. However, companies, including multi-national entities, doing business or planning to do business in Brazil should become knowledgeable about this country’s generally employee-friendly employment and benefits laws. Here, we discuss the fundamentals of Brazil’s employment laws, and some issues to follow to stay up to date.

Created in 1943, Brazilian labor and employment laws are directed by the Consolidacao das Leis do Trabalho (CLT) in conjunction with the Federal Constitution of 1988. The CLT consists of over 900 articles and provides legal standards in the following areas:

  • Workplace Safety
  • Working Hours
  • Minimum Wage Requirements
  • Vacation Time
  • Employment Contracts
  • Protection for Women and Children
  • Worker’s Health Regulations
  • Union Organization and Union Fees *

The CLT also established the legal framework for the Brazilian labor courts system and related agencies, and provides for rules and procedures for labor and employment proceedings. Since 1988, the CLT is interpreted and implemented hand-in-hand with the Federal Constitution of 1988. The institution of the Federal Constitution of 1998 introduced new labor rights, as well as enhanced certain standards provided in the CLT. Utilized in conjunction, the CLT and the Federal Constitution of 1988 provide rules and legal standards in the following areas:

  • Minimum Wage
  • 44 hour work week (8 hours a day)
  • Irreducibility of Wages
  • Unemployment Insurance
  • 13th Month Salary (also known as Christmas Bonus)
  • Profit Sharing
  • Overtime Compensation
  • Annual Vacation requirements
  • Maternity and Paternity Leave
  • Prior Notice of Dismissal
  • Retirement Benefits
  • Industrial Accident Insurance
  • Right to Strike
  • Pregnancy and Work Related Injury Leave
  • Executed Work Document (known as the Carteira de Trabalho e Previdencia Social)
  • Compensation of Commissions
  • Premiums (for night-shift, risk of work, transfers)
  • Allowances (for family, education, food vouchers)
  • Daycare Benefits
Under Brazilian law, an employer is anyone or any entity that assumes the risk of economic activity, and hires and manages personnel. An employee is any person providing services to an employer on a regular basis and receives a salary. Under this broad scope of employer-employee relationship, Brazil recognizes six types of working relationships:


This is an employee who has a written and signed Carteira de Trabalho e Previdencia Social (CTPS) with an employer, which then requires proprt recordkeeping of all employment and payroll information, including but not limited to, job position, job description, salary, benefits provided (e.g. health care), contributions (e.g. social security), and taxes paid by the employer. Based on Brazil’s ‘principle of continuity’ of employment , the general rule is that the CTPS is entered into for an indefinite time period. An employment for definite period of time is an exception to the rule, and is permitted in limited circumstances (e.g. the nature of the work justifies the foreseeable period of time or if the contract is for the performance of a specific project). 

Trabalhador Cooperado

This is when an employee becomes a cooperative (or partner) of an employer. Once an employee becomes an cooperative, the employee is no longer governed or managed under a CTPS, but instead follow the cooperative’s own statute or governing laws. Depending on the employer, some cooperatives may perform work similar to employees but are in reality cooperatives of the employer. 
Trainees are recent graduates entering the professional world, and more often then not, enter into a CTPS with the employer. As trainees are new to the work force, they are provided training for the position they will eventually hold.


Interns are students at public and private academic institutions, which include high school, technical school, and higher education, who are hired on a part-time basis. Interns can only work up to six hours a day and the part-time job position must be related to the major or a substantive course they are taking at their academic institution. Interns receive paid vacations and transportation benefits/reimbursements under the law, and no other benefits are legally required.


Self-employment is defined as any person who performs work or provides services to one or more companies without a traditional celetista employment relationship. This usually includes independent contractors, if one is truly an independent contractor, because a self-employed person does not take directives from anyone, and provides services at his or her own costs and risks without fixed working hours. A self-employed person is not entitled to benefits, such as paid vacations, 13th month salary, or meal and transportation reimbursements.

Domestic Worker

A domestic worker is a person providing services to a domestic household or individual. The CLT provides specific rules and regulations for domestic workers, and are entitled to many of the benefits required by law for celetista employees, with some exceptions. 

Under these six types of working relationships, employers must ensure that they comply with the CLT, Federal Constitution of 1988, as well as state and local laws, which can be more stringent and more employee friendly. Under the federal law, all state and local laws mimic the federal scheme and are permitted to provide more stringent requirements to protect employees and workers. For example, the federal minimum additional overtime pay is 50% of the regular hourly rate, but it may be higher if established under the state or local laws. Additionally, employers must be cognizant that collective bargaining agreements can also include a higher overtime compensation. Another example, the Federal Constitution and its corresponding federal agencies implement a fixed minimum wage every year, but some states and local laws, as well as collective bargaining agreements, may place their own minimum wage on employers so long as the minimum wage is not inferior to the federal minimum wage. 

Best Business Practice in Brazil

Record keeping, especially payroll, is essential in Brazil because if an employee brings a grievance or complaint against an employer, it is the employer’s burden to demonstrate that the employee was properly paid in accordance with the law. It is noteworthy to mention that payroll records should include holiday pay as required by law, as well as the 13th month salary as required by law. Any payroll recordkeeping that falls short of the legal requirements compensation can create a huge risk for the employer. The risk extends to companies who merge with or purchase another company in Brazil who did not employ the Brazilian employees before the acquisition. Thus, if your company is considering a merger or purchase in Brazil, please ensure that you attain and review all payroll documents to ensure pre-acquisition compliance.

Keeping Up With Brazilian Trends

Once your company is operating globally in Brazil, please be mindful that employees who receive emails and telephone calls after office hours may be eligible for overtime compensation under recent legislation enacted in January 2012. Hence, many companies are instituting policies and procedures to ensure that the only emails sent by employees after the end of office hours are those that are both urgent and work-related.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.