Hiring in Brazil requires companies to obey a set of rules in order to be compliant with local regulations. Here are some of the basic requirements related to employment agreements in Brazil.
General Information about Employment Contracts
The contract is the document which creates the bond between the employee and the employer. It must contain:
- Identification of the parties – the contract must contain a full identification of both parties, the full address of the employers’ headquarter and their main economic activity, as well as the address and date of birth of the employee.
- Essential clauses – this item encompasses the type of contract, whether it is for a specific term or not, salary, work days and hours, weekly rest period, the position that the employee will assume and date of admission. If the contract is for a specific term, it is necessary to state the beginning and end dates.
There may be additional clauses in the contract, as long as they do not oppose what was established in the collective bargaining agreements and working arrangements.
Contracts may be written or oral, and rural workers have the same rights as those in cities, with a few differences regarding bonuses for night work and the limitation of deductions in salary. Foreigners who work in Brazil are subject to the contract established by Brazilian labor law.
Individual and Non-Individual Contracts
Individual contracts are oral or written agreements, which may or may not be for a determined term, and are designed for individuals who are providing regular services to another individual or to a company, through a relationship of subordination and receiving a salary in return.
There are two types of contract: those with determined terms and those without. Contracts which have determined terms run for a maximum term of two years. They can be renewed only once, for another two years. Exceeding these four years, the contract is seen as then running for an undetermined term.
In addition to individual contracts, the employment relationship can also be subject to collective contracts that are signed by one or more unions from a certain sector and its corresponding employer’s association.
As for the non-individual contract, there are several options for team or group contracts that are established between a company and a group of employees, represented by a ‘boss’ or leader. This type of arrangement is typically used in situations where a group of employees provide a service as a group, for example as a group of musicians.
The non-individual contract arrangement reduces the employer’s responsibilities with employees when compared to hiring them individually, using individual contracts.
Trial Work Period
It is possible to agree a trial period for a maximum of three months, which is called a “período de experiência”, or trial period. During these 90 days, the company evaluates the personal skills and professional performance of the employee whilst it also gives the employee the chance to evaluate the new job. The trial period may be extended once but never exceed a total of 90 days.
Temporary Work Agreements
Temporary work in Brazil is very common as temporary workers are often hired to replace regular employees when needed, such as in the event of maternity leave. They are also used when there is a high but sudden demand for workforce, for instance when needed for seasonal work in the retail and agricultural sectors.
Temporary employees have the same rights and benefits as regular employees, apart from the minimum notice period for termination, the mandatory contribution to FGTS and any benefits related to the fixed employment agreement.
The maximum term of a temporary contract is three months and the employee cannot be directly hired by the beneficiary company; instead a temporary employment agency should intermediate.
Brazilian law only permits the rendering of services by a temporary worker if there is an employment agency acting as an intermediary in the hiring. It is also necessary to meet the following requirements:
- There must be a written contract between the employment agency and the company requesting the services.
- The need for a temporary workforce must be justified.
- The salary to be paid to the worker must be stated in advance.
- The contract must clearly specify the term of the work, i.e. the period of time that the temporary worker will provide services to the company, and this term cannot exceed three months in duration. If the company wishes to extend the contract, it must make a formal request in advance to the Ministry of Labor and, if granted, the extension cannot exceed six months.
Temporary work contracts can only be utilized in the following situations:
- The rendering of services to meet a specific demand for a specified period of time.
- Transitory (not on-going) company activities.
- A probation period of three months during which the employer can evaluate the employees, and, if necessary, dismiss them without having to pay the rights granted to regular workers by law, such as minimum notice period for termination and rights for maternity leave.
Temporary workers have the right to receive some of the benefits granted to regular workers, such as a bonus for a night shift, insurance against accidents at work and proportional vacations. They can also work up to eight hours per day with a maximum overtime period of two hours.