Recruitment in Brazil
As the largest and most populous country in South America, Brazil remains an attractive market for foreign companies looking to expand in the LATAM region. Having strong employment laws in place that favor employees, establishing and operating a business there can be a complex process. Recruiting in Brazil involves understanding the unique characteristics of its job market, labor laws, and cultural nuances.
Understanding Labor Laws and Regulations
- Employment Laws: Brazil has comprehensive labor laws (CLT – Consolidation of Labor Laws) that regulate employment contracts, working hours, holidays, benefits, termination procedures, and workers’ rights.
- Work Permits: Ensure compliance with visa and work permit regulations if recruiting foreign nationals.
Cultural Considerations
- Workplace Culture: Brazilian workplaces often value personal relationships, hierarchy, and respect for authority. Building trust and rapport is crucial.
- Communication Style: Brazilians tend to communicate indirectly and value face-to-face interactions. Understanding body language and non-verbal cues is important.
- Language: Portuguese is the official language. While English proficiency is increasing, especially in multinational companies, many candidates may prefer to communicate in Portuguese.
Recruitment Channels
- Job Portals and Websites: Popular job portals like Catho, Vagas, and LinkedIn are widely used for job postings.
- Social media: Social media platforms, especially LinkedIn, are valuable for networking and reaching potential candidates.
Education and Skill Levels
- Education System: Understand the local education system and the equivalence of degrees and certifications. Brazilian universities, such as the University of São Paulo (USP) and Federal University of Rio de Janeiro (UFRJ), are highly regarded.
- Technical Skills: There is a growing interest in technical and digital skills. Sectors like IT, engineering, and finance have a high demand for skilled professionals.
What are the labor laws in Brazil?
Employee-Friendly Regulations
Brazilian employment laws tend to favor employees. According to the Federal Constitution, working hours in Brazil should not exceed 44 hours a week and preferably 8 hours a day. Employees who work more than 8 hours a day are entitled to overtime pay.
There are two main work regimes when it comes to hiring in Brazil:
- The employee regime (CLT legislation)
- The independent contractor’s regime is ruled by the PJ model
- Differences between the Pessoa Jurídica (PJ) and CLT (Consolidação das Leis do Trabalho) regime
In general terms, the main difference between CLT and PJ is the working relationship between the contractor and the employee.
Under the CLT regime, the employee has labor benefits offered by the company. The net salary is lower, as there are fixed deductions such as IRPF and INSS.
Under the PJ regime, the worker receives a higher net salary, has no benefits other than those agreed in the contract and is responsible for paying their own taxes.
In other words, the difference between the two regimes is that, in the CLT, there is a link between the worker and the employer, the former being considered an employee or collaborator when hired. Professionals working under the PJ scheme are called self-employed. They have no connection with a company, and only enter a contract with it for the provision of services.
The main CLT rights are:
- Work card signed by employer
- Paid vacations
- Unemployment insurance in the event of dismissal
- FGTS (Severance pay fund)
- INSS (National Social Security Institute)
- 13th wage
- Working hours up to 44 hours a week
In terms of benefits, we can highlight a 13th-month salary, vacation pay, and holiday pay.
Employers must contribute 8% of an employee’s salary to the Severance Fund (FGTS), which employees may access in the event of termination. Additionally, employers are required to pay a 13th-month salary, which is equivalent to one month’s salary and is paid in two installments, usually in November and December.
In parallel, annual leave requirements are specific in Brazil. Following one year of service, the employees are entitled to 30 days of vacation leave. For that, employees could use their days off all at once or divide the vacation into three periods: one lasting at least 14 days, and two more lasting at least 5 days. Additionally, employees have the option to receive cash when not using those days, or sell, up to 10 vacation days.
Finally, it is key to understand that due to the employee-friendly laws, it is important to anticipate a potential lawsuit or penalties when making firing decisions. A written employment contract in place will create more transparency and avoid some misunderstandings.
On the contrary, the person on a PJ contract enjoys the protection of a formal contract with social security guarantees but no employment rights (see CLT rights). However, the prospect of a higher salary and a degree of flexibility (no subordination to the employer).
- The PJ contract would be signed between the company and the professional, through a civil contract and not an employment contract since it does not follow the CLT regime.
- At the start of the contract, information is provided on the parties involved: A description of the work performed and what is expected of the professional; the number of deliveries the professional will make during the month and the amount paid for these deliveries.
- For the security of both parties, a fine can be set in the event of early termination of the contract.
- The company should print out the signed contract to document and sign the service commitment.
What must be considered for foreign employees?
The following categories of non-citizens will necessitate a right-to-work verification from your company:
- Short-term inhabitants
- Long-term inhabitants
- Holders of work permits
It will be your company’s responsibility to get in touch with the Brazilian government directly to verify the status of the employee’s passport and visa. Subsequently, you must verify the authenticity of the obtained visa and work permit for Brazil and contrast them with Brazilian labor, tax, and immigration laws.
To work in Brazil, all non-citizens—regardless of whether they are new hires or are moving there—need a work visa/permit.
Non-citizen employees wanting to stay in Brazil must get a residency permit in addition to a work visa.
If a person already possesses a tourist visa, they must exit the nation and then apply from their home country for a work visa. Employees need their employer’s assistance to finish the application process for a work visa and permit; they cannot do it alone.
Your worker can remain in Brazil for an extended period with a work visa. Most workers will apply for the VITEM V work visa in Brazil.
The VITEM V work visa in Brazil can be obtained with the following qualifications:
- A minimum of nine years of education and two years of relevant professional experience in the field.
- A relevant university degree plus one year of professional experience; OR
- No relevant experience but a relevant post-graduate degree.
