Employer of Record Guide in 

Brazil

Vacation Leave

Brazilian employees enjoy generous vacation entitlements:

• Annual entitlement: 30 calendar days after 12 months of service
• Vacation bonus: Additional 1/3 of monthly salary
• Timing: Must be taken within 12 months of earning
• Splitting: Can be divided into up to 3 periods (one must be at least 14 days)

Sick Leave

• INSS coverage: After 15 consecutive days, social security covers 91% of salary
• Employer responsibility: First 15 days at full pay
• Medical certification: Required for absences over 3 days
• Job protection: Cannot be terminated while on sick leave

Maternity Leave

• Duration: 120 days (extendable to 180 days for participating companies)
• Payment: 100% of salary paid by social security
• Job protection: Cannot be terminated from pregnancy confirmation until 5 months after return
• Paternity leave: 5 days (extendable to 20 days for participating companies)

Parental Leave

• Adoption leave: Same as maternity leave (120-180 days)
• Breastfeeding breaks: Two 30-minute breaks daily until child turns 6 months
• Childcare allowance: Required for companies with 30+ female employees

Bereavement Leave

• Duration: Up to 2 consecutive days
• Qualifying events: Death of spouse, parents, children, siblings, or grandparents
• Payment: Full salary maintained

Personal & Family Leave

• Marriage leave: 3 consecutive days
• Blood donation: 1 day per year
• Electoral duties: Time off for voting and election activities
• Military service: As required by law

Summary

Termination Types

Termination With Cause (Justa Causa):

• No severance required
• Must involve serious misconduct (theft, insubordination, abandonment)
• Strict legal requirements for documentation

Termination Without Cause:

• Most common form of termination
• Requires full severance package
• Employee entitled to unemployment benefits

Mutual Agreement:

• New option since 2017 labour reform
• Reduced severance obligations
• Requires union or labour ministry approval

Notice Period Requirements

• Advance notice: 30 days minimum
• Notice increase: Additional 3 days per year of service
• Payment in lieu: Employer may pay instead of working notice
• Employee resignation: 30 days notice required

Severance Pay

Brazilian severance is among the world's most generous:

FGTS (Severance Fund):

• 8% of monthly salary deposited throughout employment
• Employee receives full balance plus 40% penalty paid by employer

Additional Severance Components:

• Proportional 13th salary
• Proportional vacation + 1/3 bonus
• Outstanding salary and overtime
• Advance notice payment

Total Cost Example: For a 3-year employee earning R$5,000/month:

• FGTS balance: ~R$15,000
• Employer penalty: ~R$6,000
• Other components: ~R$8,000
• Total severance: ~R$29,000

Probationary Periods

• Maximum duration: 90 days
• Renewal: Once only (total 180 days maximum)
• Reduced obligations: Lower severance during probation
• Equal rights: Same salary and benefits as permanent employees

Final Pay Requirements

• Payment deadline: 10 days after termination
• Required documents: Work certificate, FGTS statement, unemployment insurance forms
• Penalties: Daily fines for late payment

Anti-Discrimination & Retaliation Laws

Strong protections exist for:

• Pregnancy: Cannot terminate pregnant employees
• Union activity: Protection for union representatives
• Workplace accidents: Job stability after accidents
• Discrimination: Based on race, gender, age, religion, disability

National Holidays

Brazil observes the following national holidays:

Regional Holidays

States and municipalities may declare additional holidays:

• São Paulo: Consciousness Day (November 20)
• Rio de Janeiro: St. George's Day (April 23)
• Municipal holidays: Vary by city (patron saint days, local commemorations)

Holiday Pay Rules

• Payment: Full day's salary for statutory holidays
• Working on holidays: Double pay (200% of regular rate)
• Holiday falling on weekend: No substitute day required
• Religious accommodation: Employers must accommodate religious observances

Required Documents for Employment

Employment Contract (Carteira de Trabalho):

• Must be registered within 48 hours
• Digital format (eSocial system)
• Includes salary, position, start date, benefits

Government Registration:

• CPF (Tax ID number)
• PIS/PASEP (Social security number)
• Electoral certificate
• Military service certificate (men)

Personal Documents:

• Identity card (RG)
• Proof of address
• Educational certificates
• Professional licenses (if applicable)

Language Requirements

• Official language: Portuguese
• Contract language: Must be in Portuguese
• Workplace communication: Portuguese required for most positions
• Foreign executives: May use English with proper documentation

Background Checks & References

• Criminal background: Permitted for relevant positions
• Employment verification: Standard practice
• Educational verification: Required for professional roles
• Credit checks: Limited to financial positions
• Consent required: Written authorization for all checks

Data Protection & Privacy

Brazil's General Data Protection Law (LGPD) requires:

• Explicit consent: For personal data collection
• Data minimisation: Only collect necessary information
• Security measures: Appropriate technical safeguards
• Data subject rights: Access, correction, deletion rights
• Privacy officer: Required for large companies

IP Assignment & Confidentiality

• Work-for-hire: Employer owns work created during employment
• Inventions: Special rules for employee innovations
• Confidentiality: Must be explicitly stated in contract
• Non-compete: Limited enforceability (maximum 2 years)

Probation Period Setup

• Duration: Up to 90 days (renewable once)
• Performance evaluation: Regular assessments recommended
• Termination rights: Reduced severance obligations
• Benefits: Full benefits required during probation

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• eSocial registration and compliance
• Employment contract preparation
• Payroll tax calculations
• Benefits administration
• Labour law compliance
• Government reporting requirements

Worker Classification: Employee vs. Contractor

Brazilian labour law strongly favours employee classification:

Employee Indicators:

• Regular work schedule
• Employer-provided tools/equipment
• Subordination to employer
• Personal service requirement
• Salary payment (not invoicing)

Contractor Requirements:

• Independent business operation
• Own tools and equipment
• Multiple clients
• Invoice-based payments
• Professional autonomy

Misclassification Risks:

• Automatic employee reclassification
• Retroactive benefits and taxes
• Significant penalties and fines
• Labour court proceedings

Note: Brazilian courts presume employment relationships exist unless proven otherwise.

Unionization & Collective Agreements

Brazil has a complex union structure:

• Mandatory union tax: 1 day's salary annually (recently made voluntary)
• Collective bargaining: Annual negotiations by category
• Union representation: One union per professional category per region
• Strike rights: Constitutionally protected
• Collective agreements: Override individual contracts in many areas

Cultural Norms & Workplace Expectations

Brazilian workplace culture emphasises:

• Relationship building: Personal connections are crucial
• Hierarchy respect: Formal titles and respect for seniority
• Work-life balance: Family time is highly valued
• Communication style: Indirect and diplomatic
• Punctuality: Flexible approach to time in some regions

Remote Work Considerations

Recent labour reforms address remote work:

• Legal framework: Specific remote work regulations since 2017
• Equipment: Employer must provide or reimburse necessary tools
• Expenses: Utilities and internet may be employer responsibility
• Health and safety: Employer obligations extend to home office
• Hybrid arrangements: Flexible combinations allowed
• Performance management: Results-based evaluation encouraged

Note: Remote work agreements must be explicitly documented in employment contracts.