Hiring in Brazil - understanding the Brazilian Labour Law
What foreign employers should know about Brazilian labour law and insights into the experiences of foreigners` living in Brazil.
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Understanding the Brazilian Labor Law
créditos da imagem: Jean Baptiste Debret/Biblioteca Brasiliana
PART 1 - A Guide for Foreign Employers
1. Remote Work vs In-Person Operations
As Brazil is as a key player in the latin america market, foreign companies are increasingly looking to tap into its diverse workforce. However, hiring in Brazil can vary significantly depending on the employment setup—particularly between fully remote and in-person operations. Understanding the legal implications of each scenario is a “must know” for a successful integration into the Brazilian market.
As a staffing agency owner in Brazil, I´ve been approached several times by foreign companies looking to hire professionals here. They often find it hard to understand Brazilian legislation. Brazil offers a labor market with diverse talent, but it's important for foreign businesses to understand our unique and complex legal framework to ensure compliance and smooth operations. This system is markedly different from that in the United States - where is an hourly valuation for every single service - especially when employers demand exclusivity within the agreement.
Talking to foreigners, expatriates and local entrepreneurs can be useful to discover the main challenges they have been facing.
Here’s a short overview to get you started:
Scenario 1: Hiring for Remote Work
In the tech industry, it's common for companies to hire Brazilian employees to work fully remotely. In these cases, the employee typically works from Brazil for a company headquartered in another country and the contract is usually structured aligned with the laws of the headquarter. This approach requires careful legal structuring:
Employment Contracts: Contracts should specify which jurisdiction's laws govern the employment relationship. It's advisable to consult with legal experts in both countries to ensure the contract complies with Brazilian labor laws while considering the headquarters' location.
Benefits and Rights: Even if the contract observes the laws of another country, certain local benefits might still apply, such as paid national holidays specific to Brazil.
Tax Obligations: Understanding tax obligations in Brazil is essential. Employers must navigate both Brazilian tax laws and those of the country where the company is based to ensure proper contributions.
Scenario 2: Starting In-Person Operations in Brazil
When a foreign company establishes in-person operations in Brazil, it must fully comply with Brazilian labor laws. This scenario requires a deep understanding of local regulations to avoid legal pitfalls. You need to partner with local law and accounting firms and trustable local people to avoid unexpected issues in the future.
Employment Contracts: Brazil recognizes both indefinite and fixed-term contracts. While indefinite contracts do not require a termination date, fixed-term contracts are used for temporary projects and can only be extended under specific circumstances.
Working Hours: The standard workweek in Brazil is 44 hours, typically distributed as 8 hours per day from Monday to Friday, with a 4-hour shift on Saturdays. Overtime is permitted but comes with additional costs at a rate of at least 50% more than the regular hourly rate.
Minimum Wage and Benefits: The national minimum wage is updated annually, and it's essential to keep abreast of these changes. Benefits such as the 13th salary (an extra month's pay at year-end), vacation pay (plus 1/3 additional), and FGTS (a severance fund) are mandatory.
Labor Unions and Collective Bargaining: Brazil has a strong union presence across various sectors. Employers must be prepared to engage in collective bargaining and adhere to collective agreements that often stipulate conditions superior to the legal minimums.
Termination and Severance: Terminating employees can be costly if not managed carefully. Severance calculations depend on the tenure of employment and the reasons for termination, with strict rules protecting employee rights.
Regulatory Compliance: Employers must register employees with the Brazilian Ministry of Labor, contribute to social security, and adhere to health and safety regulations.
Cultural Considerations: Besides legal compliance, understanding and integrating into Brazil's business culture is vital. Practices such as personal relationships and direct negotiations are often key to business success.
Local Support: Establishing a local HR team or partnering with a local firm can be highly beneficial. These professionals can provide invaluable assistance in navigating Brazil's complex bureaucratic landscape and help in adapting business practices to local norms.
For foreign companies looking to establish or expand their presence in Brazil, is important to understand these aspects of Brazilian labor law in order to build a productive work environment.
PART 2 - Developing businesses in Brazil- insights from Anna Bokhmat
In your opinion, what every foreign people/company must know before developing businesses Brazil?
“Brazil presents what can be described as “transparent barriers.” These are unique challenges that may not be immediately visible because, on the surface, Brazil shares similarities with Europe. Let’s take a simple example that most foreigners immediately encounter: Latin-based language, familiar culinary elements, and Catholic heritage. However, Brazil’s cultural and social nuances are deeply distinct and require careful understanding. For that, let’s take the same seemingly obvious examples and still find some differences:
Language and Cultural Roots: Although Portuguese is the official language, it has been shaped by African, Indigenous, and European influences, which even diverge significantly from the Portuguese spoken in Portugal. Regional dialects, colloquialisms, and accents vary, so building rapport often requires sensitivity to these linguistic nuances.
Culinary Diversity and its Influence on Mindset: Brazilian cuisine, blending Portuguese, African, and Japanese influences, embodies values of community, resilience, and adaptability. Feijoada—a communal stew rooted in African tradition—emphasizes gathering, sharing, and resourcefulness, reflecting how Brazilians value unity. São Paulo’s Japanese-Brazilian culture adds a layer of precision and respect for tradition. Food here is more than sustenance, it’s a shared experience that fosters inclusion and shapes business values like teamwork and adaptability.
Religious Syncretism: Catholicism holds a strong influence in Brazil, but African polytheistic beliefs have blended with Catholic traditions, pairing deities with saints and creating unique expressions of faith. Evangelical churches also hold a significant following. These spiritual dynamics permeate Brazilian culture, shaping values, holidays, and community structures.
Of course, these are only simple examples, but they highlight the importance for the ones who come not to get too comfortable with what seems the same, but rather search for subtle changes that make a real difference in understanding Brazil.”
Brazilian people are known as having more casual style in their communication. Could you tell your opinion about the main differences and challenges in building a team in Brazil, specially sales teams?
“In Brazil, personal relationships often hold more importance than revenue targets or the company mission. This focus on relationships shapes how teams work and how sales strategies succeed. Building a strong team—especially in sales—requires local leadership or team members with deep experience in the Brazilian market. Since only a few Brazilians speak English, most of your team will likely be Portuguese speakers, and language heavily influences work culture and communication styles.
This cultural context affects how goals are set, feedback is given, and tasks are understood. For example, a direct “no” is rare in Brazil, instead, feedback may be given indirectly, and understanding these subtle cues is essential for clear communication. These differences impact team motivation and alignment with company goals.
Unlike the more direct, revenue-focused approach common in Northern countries, Brazil’s relationship-driven culture values trust and collaboration. Recognizing these cultural nuances is key to boosting team commitment and sales success, as employees respond best to leaders who respect and adapt to the Brazilian way of working.”
Anna Bokhmat is co-owner of AB&VP, a São Paulo based consulting agency. She provides strategic insights to companies seeking to enter the Brazilian market, utilizing her deep understanding of its unique challenges to ensure successful market entry and sustainable growth. Thank you for sharing your insights with us!
Thanks for reading!
Juliana.