Brazil’s status as South America’s largest country has helped shape it into a dynamic economic force. However, between Brazil’s constitution and collective bargaining agreements (CBAs), the labor laws that govern remote talent in Brazil can get pretty complex.
It’s important to understand Brazilian workers’ expectations, and your company’s legal obligations, when managing full-time employees and contractors. Failure to do so could result in some costly penalties.
Key takeaways:
- The fines for not complying with Brazilian labor laws are steep and can reach millions.
- Employees in Brazil have a right to disconnect, which is broadly supported by multiple pieces of legislation.
- Brazilian labor law includes unique entitlements for workers, such as vacation bonuses during an employee’s annual leave.
Labor Laws in Brazil: What You Need to Know
Full-time talent in Brazil receives labor protections governed primarily by the Consolidação das Leis do Trabalho (CLT) or Consolidation of Labor Laws. This legislation entitles workers to a range of statutory employee benefits, including paid vacation, a 13th-month salary, and Social Security.
The country also made recent strides in promoting equal pay, with legislation mandating that companies with over 100 employees publish transparency reports detailing any gender-based wage disparities.
Independent contractors, however, are not governed by the same rules that protect full-time employees. This makes the risk of misclassification particularly significant for employers with workers in Brazil.
Businesses may be found liable for fines and other compensation whenever working conditions demonstrate regular hours, exclusivity to an employer, or subordination.
The rights and benefits outlined by Brazilian labor laws can be expanded on and refined by collective bargaining agreements (CBAs). CBAs are regularly negotiated — say, every two years — and employees' rights to unionization are constitutionally protected.
Who Is Covered by Employment Laws in Brazil?
Full-time employees in Brazil receive protection as outlined by the country’s labor laws. This is true regardless of whether the employment is categorized as hourly, salaried, or contracted for an indefinite or predefined period.
Independent contractors, on the other hand, are not governed by Brazil’s Consolidation of Labor Laws. They can potentially receive protections, however, through their CBA, if they have one.
Employment Contracts & Probation Periods
Brazilian employment contracts can be either indefinite or fixed. Indefinite-term contracts are the most common and, by definition, offer ongoing employment. Fixed-term contracts, on the other hand, are typically used for projects lasting up to two years.
No matter if it's fixed or indefinite, the contract should detail conditions of employment, including but not limited to salary and benefits, working hours, and whether the employee is subject to confidentiality, non-disclosure, or non-compete agreements.
In specific situations, temporary agreements can also be utilized for employment periods of up to 180 days. Probationary periods last up to 90 days.
Working Hours & Wages
Brazil's national minimum wage is BRL 1,518 per month as of 2025. The standard workweek is 40 hours, extending to 44 hours for those on a six-day schedule.
Employees in Brazil can work up to two hours of overtime a day, and it’s paid at 1.5 times their regular rate. If they work on a holiday or weekend, they earn double their usual pay. On top of that, there’s a 13th-month salary, basically an extra month’s pay, which is split into two parts and paid out in November and December.
Health & Safety Standards
For most employees in Brazil, the workday is capped at eight hours, with overtime compensation for any additional work.
Rest and meal breaks are mandatory for full-time employees, requiring a minimum 60-minute meal break for workdays over six hours. Additionally, workers are entitled to a weekly day off, which is typically taken on Sunday.
Companies incorporated in Brazil are also responsible for ensuring a safe work environment, which includes establishing and maintaining an in-house commission dedicated to preventing accidents and sexual harassment.
Remote Work
Today, companies hiring remote workers in Brazil must define the arrangement with a written contract that specifies responsibilities for equipment, internet costs, and time tracking.
Employers are also responsible for ensuring employees aren’t overworked and that their working conditions are adequately supported.
While a single law doesn't protect remote workers' right to disconnect in Brazil, work-life balance — particularly the right to not respond to communications outside of standard working hours — is broadly protected as part of labor law.
Employer Taxes
Brazilian employers must pay more than one-third of an employee's salary toward benefits. These contributions support various programs, including:
- Social Security: 20% - 22%
- Employees' Severance Indemnity Fund: 8%
- Work Accident Insurance: 1% - 2%
- Social Assistance: 5% - 6%
Termination Guidelines & Severance Pay
When terminating an employee without just cause, employers must provide 30 days' notice, with an additional three days for each year of service, up to a maximum of 90 days. CBAs may require even more extended notice periods.
A key aspect of Brazilian termination law is the Severance Fund (FGTS). Each month, employers contribute an amount equivalent to 8% of the employee's gross salary into this holding account. Employees receive the full balance upon termination.
If the termination is without just cause, the company must also pay the employee an additional 40% of the account balance as a penalty.
In addition to the FGTS, terminated employees are entitled to any unpaid wages, a prorated 13th-month salary, and any accrued and unused vacation pay, along with compensation for their vacation bonus, if any remains.
Health Insurance
Brazil’s Single Health System guarantees residents in Brazil with free universal access to public health services. Both employer and employee Social Security contributions support the program.
Brazil’s public health system can be supplemented with optional private healthcare. Employers can, but are not obligated to, provide private care. In fact, many workers expect private health insurance to be included in their benefits package.
Paid Leave Laws
Companies that employ Brazilian workers must follow various mandatory paid leave laws.
Vacation and Holiday Leave
Brazilian employees are entitled to 30 days of annual leave after one year of employment. This leave can be split into a maximum of three periods, provided one period is at least 14 consecutive days, and the others are no less than five consecutive days each.
Unused leave generally can't be carried over, though up to 10 days can be cashed out. Employees also receive paid time off for public holidays, which typically include:
- New Year's Day
- Carnival
- Shrove Tuesday
- Tiradentes Day
- All Souls' Day
- Republic Day
Employees are also entitled to a vacation bonus equal to one-third of their monthly salary.
Sick Leave
When an employee is on sick leave in Brazil, employers are responsible for paying the full salary during the first 15 days. If a doctor confirms the need for a more prolonged absence, Social Security will cover the employee's salary from the 16th day onward.
Parental Leave
Pregnant employees receive 120 days of paid maternity leave, and new fathers are entitled to five days of paid paternity leave.
Brazilian Independent Contractors
Companies can hire independent contractors in Brazil, but it's essential to follow all labor laws so a freelancer isn’t mistakenly classified as a contractor while functioning more like a full-time employee.
For example, classifying an employee as a contractor could be viewed as an attempt to avoid giving workers the benefits that employees are entitled to, like vacation pay and the 13th-month salary.
If a freelance arrangement is determined to be an attempt to commit fraud under labor laws, it can be canceled by a Brazilian court. This can then lead to legal issues and potential fines for the employer.
Penalties for Not Following Brazilian Labor Laws
Misclassifying workers in Brazil carries significant penalties. Employers can face fines, orders to pay back wages and benefits, back taxes, and other legal and administrative costs.
As of 2025, a fine for employee misclassification is around BRL 400 per employee. However, penalties can range from 75% to 225% of the total amount owed, and in some cases, fines can reach millions.
How to Stay Compliant When Hiring in Brazil
Companies hiring in Brazil have two main options: establish a legal entity or hire employees through an Employer of Record (EOR).
Establishing a legal entity typically involves a complex and time-consuming process, incurring significant costs for registration, legal fees, and ongoing compliance.
Wondering whether that’s the right path for your business? Check out our article about when companies should open a legal entity. Chances are you'll find that working with an EOR is much easier to navigate unless you plan on a significant expansion in a particular country.
An EOR takes on all the complexities of Brazilian labor law, including payroll, taxes, benefits, and compliance, on a company’s behalf. This significantly reduces administrative burdens and protects employers from the risks associated with misclassification or non-compliance with local regulations.
Hire in Brazil with RemoFirst
If you’re ready to expand globally through international hiring, RemoFirst can help.
RemoFirst helps companies hire and manage employees in over 185 countries and manage and pay independent contractors in more than 150.
Our experts in employment law ensure your business remains compliant with all local labor regulations. We can even help you offer private health insurance plans for your employees.
To learn more about how RemoFirst can help your company go global, schedule a demo today.
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