Employment laws in Brazil

For global businesses, like U.S. companies, hiring in Brazil, employment laws can be complex to navigate. The country has detailed rules covering everything from working hours and paid leave to termination procedures and severance payments. 

If you’re unfamiliar with Brazilian law, figuring out which regulations apply and how to follow them can quickly become overwhelming. Using an Employer of Record (EOR) offers a streamlined approach to navigating local laws.

An EOR like Payoneer Workforce Management helps with onboarding talent in Brazil without setting up a local entity, while offering compliance support.

In this guide, we walk you through Brazil’s labor laws, from hiring to termination.

Key employment laws in Brazil

In Brazil, employment is primarily governed by the Consolidação das Leis do Trabalho (CLT), or the Consolidation of Labor Laws. Introduced in 1943, this outlines the rights and responsibilities of both employers and employees. It covers a broad range of employment topics and applies to all formal employment relationships in Brazil. 

The Brazilian Federal Constitution also plays a critical role in local labor rights, covering freedom of association, the right to strike, and protections against unjust dismissal. In addition, Brazil’s employment laws​ may encompass decrees and regulations issued by the Ministry of Labor and Employment.

Understanding Collective Bargaining Agreements (CBAs) is also important. CBAs can establish terms and conditions that go beyond the protections established in the CLT, like higher wages, additional leave entitlements, or special working conditions.

Contract employment laws in Brazil

Before hiring in Brazil, it’s essential to classify employees correctly and have a contract in place, which will protect both the employee and the employer.

Contract types

Types of employment contracts in Brazil.

• Open-ended (indeterminate-term) contracts: This is the most common type of employment contract in Brazil. It does not have a defined end date and is considered the standard for most long-term employment relationships. 

• Fixed-term contracts: These are for roles with a clearly defined duration, like covering a temporary project or maternity leave. These contracts can last up to 2 years and may be renewed once. After that, if the employee continues working, the contract automatically becomes open-ended.

• Temporary contracts: These are used for short-term employment needs. Employees may not be hired directly for more than 180 days.

• Intermittent contracts: These are for workers hired for non-continuous services, where they’re only paid for hours actually worked. With this contract, employers can moderate the daily, weekly, and monthly work hours in compliance with the CLT.

Essential contract elements

While verbal contracts are technically valid, written contracts are highly recommended. A well-drafted employment contract that adheres to Brazil’s employment laws should include:

• Job title and description
• Compensation (specify the currency it should be written in), benefits, and bonus pay
• Working hours, overtime, holidays, and leave entitlements
• Terms of employment, where applicable, and provisions for termination
• Working hours and place of work
• Probation period

Statutory employment rights in Brazil

Employment rights in Brazil are largely governed by the CLT and apply to all employees across the private sector.

Working hours

As per Brazil’s labor laws, standard working hours are 8 hours per day and 40-44 hours per week. These are distributed over 5 or 6 workdays, depending on the employer’s schedule. 

Any hours worked beyond these limits are considered overtime. There is a legal cap of 2 hours’ overtime per day. Overtime arrangements may be outlined in the employment contract.

PTO and public holidays

Employees are entitled to 30 paid vacation days annually, after 1 year of working. In addition to their standard pay, employees are entitled to a vacation bonus, which is equal to ⅓ of their monthly salary, paid when vacation is taken.

Brazil observes 13 national public holidays (though this number can vary by state), which are fully paid days off. If employees are required to work on a public holiday, they must be compensated with 200% pay.

Minimum wage and overtime

Brazil’s minimum wage is reviewed and adjusted annually. As of 2025, the national minimum wage is BRL 1,518 per month ($277). Some states may have higher regional minimum wages depending on local legislation and the cost of living.

Collective Bargaining Agreements (CBAs) may also set higher wages for specific sectors.

Brazil’s employment laws dictate that any work performed beyond the standard 44-hour weekly limit or 8-hour daily limit qualifies as overtime. Standard overtime is paid at 150% of the regular hourly wage. Overtime on Sundays and public holidays must be paid at 200% (double pay) unless a compensatory rest day is granted.

Find out more about how to pay your employees in Brazil.

Mandatory benefits

In addition to salary, employment laws in Brazil​ dictate that employers must legally provide the following benefits:

• Social security (INSS): Employer contribution ranges from  7.5% to 14% of the employee’s salary.
• Pension: Included in the INSS; employers may offer private pension plans, though this is optional.
• Sick pay: The first 15 days are paid by the employer, and from day 16 onward, sick pay is covered by the INSS.
• Parental leave: Mothers are entitled to 120 days of paid leave, which may be extended under certain conditions. Fathers receive 5 days, which is extendable to 20 days in some cases. 
• 13-month bonus: Employees are entitled to an annual 13th salary, equivalent to 1 full month’s salary, paid in 2 instalments across November and December. 
• Vacation bonus: Employees receive a vacation bonus equal to ⅓ of their monthly salary, paid at the start of their PTO.
• Leave and public holidays: Employees are entitled to various forms of paid leave, including annual vacation, sick leave, parental leave, bereavement leave, and public holidays.

For a full list, see our guide to the leave policy in Brazil.

Brazil’s employment law on termination​

Brazil’s laws on firing employees​ are strict, especially when it comes to severance, notice, and documentation. According to Brazil’s employment law, termination​ can be with or without cause. 

Termination without cause

The most common form of dismissal, termination without cause, is defined as the employer choosing to end the contract for reasons not related to employee misconduct. 

In the case of termination without cause, the employer must provide:

• Advance notice, or payment instead of notice
• Unused vacation pay
• 13th salary (prorated)
• A penalty of 40% on the total FGTS deposits made during the employment period.
• Severance payment as per CLT and the employee’s contract

Termination with cause

This is reserved for serious misconduct as defined by the CLT, such as theft, dishonesty, or repeated poor conduct after warnings. In this case, the employee does not have access to the standard termination benefits, including the FGTS withdrawal and a 40% fine or the pro-rata 13th salary. However, vacation payout would still be applicable.

Due to the risks involved, employers may consult local legal counsel for this type of termination or use an EOR like Payoneer Workforce Management for guidance 

Notice period 

Under Brazilian law, both employers and employees must observe a notice period of 30 days. Plus, the employer must add 3 days for each year of service, up to a maximum of 90 days total.

Notice can be worked or paid in lieu.

Employees working notice may reduce working hours by 2 hours/day or 7 days total.

Navigate employment laws in Brazil with Payoneer Workforce Management

Brazil’s labor laws are some of the most detailed, complex, and enforced. For companies hiring from overseas, there’s little room for error, and non-compliance may lead to significant legal ramifications. 

Working with an EOR can help reduce this administrative burden. Our unified platform assists with handling employment contracts, payroll, tax compliance, benefits, and terminations as per local regulations. 

Book a demo today!

FAQs

1) What are the employment laws in Brazil?

Employment in Brazil is regulated by:

• The Consolidação das Leis do Trabalho (CLT)
• Collective Bargaining Agreements (CBAs)

These laws protect employee rights in areas such as minimum wage, working hours, paid leave, overtime pay, termination procedures, and protection from unfair dismissal (in case of pregnancy, injury, union roles).

2) What are the labor rights in Brazil?

Employees in Brazil are entitled to a wide range of mandatory benefits, including:

• Social security (INSS) contributions
• Paid sick leave
• Paid maternity and paternity leave
• 13th salary (Christmas bonus)
• Vacation bonus (⅓ of monthly salary)
• 30 days of paid annual vacation
• Public holidays 

3) What is the termination law in Brazil?

Termination in Brazil can be with or without cause and must follow strict legal procedures. The notice period is a minimum of 30 days, plus 3 days for each year of service.

• Without cause: The employee is entitled to prior notice (or pay in lieu), pro-rated benefits, a 40% FGTS penalty paid by the employer, and access to their FGTS account.
• With cause: This is reserved for serious misconduct and results in loss of several entitlements. It requires clear evidence and legal justification.