What are the labor laws of Brazil?
As the biggest country in South America and among the top economies in the Americas, Brazil is a solid choice for companies who are looking for an attractive market to source talent. Depending on your business needs, you might be looking to hire a full-time employee, who can either work at an office or remotely. Alternatively, if you want someone to work on a project on a short-term basis, you might decide to recruit an independent contractor. Both of these arrangements come with certain legal responsibilities.
However, before you consider hiring in Brazil, you need to get familiar with the Brazilian labor law and wrap your head around its intricacies. Compliance with local rules and tax laws is essential, and many companies struggle to adhere to the requirements. Payroll is also tricky as requirements vary across countries.
The best way to hire and pay remote workers in Brazil (and beyond) is to work with an employer of record who can handle the legal responsibilities for you and ensure compliance.
In this guide, we’re going to explain key labor laws in Brazil, statutory employment rights, and unique considerations for employers looking to hire in Brazil. We’ll also explain why partnering with EOR like Remote is the fastest and the simplest way to stay compliant with Brazilian employment laws.
Employment law in Brazil has different sources, including:
- the Consolidated Labor Laws (CLT)
- the Brazilian Federal Constitution; and
- various decrees and regulations constituted by the Ministry of Labor and Employment.
Additionally, Collective Bargaining Agreements (CBAs), which we discuss in detail later, also impact the employee-employer relationship. They dictate the annual salary increases and regulate employees’ rights and benefits. Overall, employment law in Brazil tends to favor employees, which is something to keep in mind while hiring in the country.
To attract more foreign investment, the Brazilian government has modified its employment laws over the years to increase flexibility. However, despite the government’s best efforts to make the job market more accessible to foreign businesses, wrapping your head around local legalities can be hard.
To ensure legal compliance, employers who think about hiring remote employees abroad have to establish their own legal entity in Brazil or work with a global employment solutions provider, also known as an EOR. While both of these options allow companies to legally hire employees in Brazil, working with a global employment service is significantly less complex and time-consuming.
Remote owns its own legal entity in Brazil, which means you can be assured of top-quality service, affordable pricing, and maximum security for your data and intellectual property. Whether you want to hire full-time employees or contractors, Remote will take care of contracts, onboarding, benefits, invoicing, and payroll.
Check out our detailed guide on how to choose an employer of record in Brazil for more in.