Hire and pay employees in Brazil

Employer of Record (EOR) vs. entity

The first step when hiring Brazilian employees is deciding whether to do so through an EOR or your own business entity.

• Legal entity in Brazil. Setting up a legal business entity means appointing a local legal representative, submitting notarized business documents (in Portuguese) to the State Board of Commerce and the National Companies Registry Office, registering with the state social security office (INSS), and more.
• Brazilian EOR. An EOR is a third-party service that operates as a local employer on your behalf. It handles all the legal requirements, payroll, contracts, benefits compliance, and other important hiring considerations.

Your company's size, resources, and plans to scale will all help you decide between an EOR or your own entity. Here are the pros and cons of each:

Once you choose an EOR that works for your needs, you can start onboarding your new employee by collecting their information: their full name, permanent address in Brazil, Individual Tax Registration (CPF) number, and bank account information.
Hiring in Brazil through an EOR can still be a complex process. Learn the steps, and how Rippling can help your hire and onboard Brazilian employees in just 90 seconds, in our guide to hiring with an EOR.

Classifying Brazilian workers: employees vs. contractors

When you hire Brazilian workers, there's another critical consideration early in the hiring process: how you'll classify them. Similar to many countries, Brazil has distinct legal requirements for categorizing employees and independent contractors. Misclassification could result in hefty fines, payment of back wages and taxes, legal and administrative costs, and other penalties.

Here are some of the ways Brazil distinguishes between employees and contractors:

Learn more about correctly classifying your Brazilian workers—and staying compliant with Brazilian labor and employment laws—in our classification guide.

Work permits for Brazilian employees

Before continuing the hiring process, you need to know whether your prospective new hire is authorized to work in Brazil. Under Brazilian law, any foreign national who isn't a Brazilian citizen and doesn't have permanent residence in Brazil will need both a work permit and a residence permit in order to legally work in Brazil. After their work permit expires, your employee can renew it, apply for permanent residency in Brazil, or return to their home country.

When hiring foreign nationals who live in Brazil, these are the types of work visas you're most likely to encounter:

• VITEM II (business trip) visa: Foreign visitors on business trips in Brazil must have a VITEM II visa, which allows them to work in Brazil, but not take any money from Brazilian companies. This visa is valid for up to 10 years and allows stays up to 90 days at a time.
• VITEM V (temporary work) visa: This is the most common work permit issued to foreign nationals in Brazil, allowing them to work in Brazil for up to two years.
• Permanent work visa (Visto Permanente): Permanent residence visas are available for foreign nationals who have worked at least two years on a VITEM V visa, managers, directors, professional researchers, scientists, and investors with more than $50,000 invested per person or $200,000 invested per company.

To learn more about work and residency permits and how to apply, see our guide to work permits in Brazil.

New hire onboarding checklist

After you hire employees and ensure they are legally allowed in Brazil, it's time to onboard them. Onboarding is a crucial time in an employee's lifecycle—it sets the tone for the entire employment relationship.

That's why a successful onboarding experience lasts much longer than a new employee's first day. Here are some steps to take throughout a new employee's first 90 days of onboarding to help lay the groundwork for their successful tenure:

Before their first day

• Complete a background check. 
• Send an offer letter (more on that in the next section).
• Complete their new hire paperwork.
• Enroll them in benefits.
• Add them to payroll. 
• Order and configure their devices. 
• Schedule their orientation.
• Set up their workspace.

On Day 1

• Send a welcome email. 
• Give them an agenda. 
• Schedule a meeting with their supervisor.
• Schedule a meeting with their onboarding mentor. 
• Give them an office tour. 

During their first 90 days

• Schedule organizational and role-specific training.
• Assign work and help them set goals. 
• Schedule regular check-ins. 
• Ask for their feedback on how to improve the onboarding experience.

For a comprehensive onboarding checklist, see our guide on new hire onboarding in Brazil.

What to include in an offer letter in Brazil

In Brazil, an offer letter (also known as an employment agreement) is one of the first legal documents you create to start a professional relationship with a new hire—which is why it must be compliant with Brazilian labor laws. Here's what to include in your offer letter to make it legal and compliant:

• Position, job description, and job duties
• Start date and working hours
• Whether the agreement is fixed-term or indefinite
• Probationary period
• Compensation and benefits
• Vacation leave policy
• Payment frequency
• Termination policy
• Working conditions
• Collective bargaining agreements (CBAs)
• Confidentiality and non-disclosure agreements
• Contact information
• Non-compete and non-solicit agreements

Read more about crafting a legally compliant offer letter in Brazil in our guide.

NDAs and confidentiality agreements in Brazil

Non-disclosure agreements (NDAs) are typically included with or in an employment agreement. In Brazil, NDAs are common and considered enforceable as long as they meet a few requirements:

• They must comply with Brazilian contract law.
• The aggrieved party must be able to prove damages if the NDA is breached.

In Brazil, there aren't any specific laws that govern NDAs—they fall under more general contract laws. For that reason, it's important to be as specific as possible in an NDA signed by parties in Brazil, in case a dispute arises. NDAs should include:

• Clear indication of all parties involved (and their legal representatives, if applicable).
• A definition of the confidential information protected by the NDA.
• Any exclusions from confidentiality. 
• The term of the agreement—how long it lasts, and what happens when it is terminated.
• What happens if the NDA is breached.
• A clause on personal data protection under the Brazilian General Personal Data Protection Act (LGPD).
• Jurisdiction, which determines which state's laws govern the agreement.

Learn more about the different types of NDAs, their essential components, and what they can cover in our guide to NDAs in Brazil.

Running background checks on Brazilian employees

Background checks are a common part of the recruitment process in Brazil, as employers want to verify their potential new hires' education and work history. 

Background checks are legal in Brazil, with a few important caveats: you have to get the prospective employee's consent for any information you gather, and collecting certain types of information risks running afoul of anti-discrimination laws.

Here are the types of background checks that are common, and some you can consider if the role calls for it:

Paying employees in Brazil

Once you've chosen an EOR and a payroll solution, follow these steps to pay your employees in Brazil:

• Ensure Brazilian employees are correctly classified.
• Collect employee information, including name, permanent address in Brazil, CPF number for income tax, their employment agreement and any CBAs that apply, and their bank account information.
• Run payroll. Note that Brazil requires all payroll transactions to be done in Brazilian Real (BRL).

Employers of Brazilian workers are responsible for calculating payroll deductions, which include employment costs like pension fund payments, severance fund (FGTS), accident insurance, and additional social security contributions. Here's what to expect:

Learn more about paying Brazilian employees in our step-by-step guide to running payroll for employees in Brazil.

Mandatory employee benefits in Brazil

Brazil's labor laws mandate certain benefits for all full-time employees, even if their employer is based outside of Brazil.

Mandatory benefits include:

• Social security and pension. Both employees and employers make contributions to the National Institute for Social Security (INSS). INSS covers employees' national pension plans, employment insurance, and disability pay.
• Severance funds. Brazil requires employers to pay into severance funds for all employees, called Fundo de Garantia do Tempo de Serviço (FGTS). If an employee is terminated, their severance pay comes from this fund.
• Minimum wage and overtime. Brazilian employees must earn at least the minimum wage of R$1,302.00 per month. Any employee who puts in more than eight hours per workday or 44 hours per working week is entitled to overtime pay.
• Time off, vacation, and vacation bonus. All employees in Brazil are entitled to annual leave, based on the number of unexcused absences they had in the previous calendar year. They also receive an annual vacation bonus.
• Other leave. Brazilian employees are also entitled to public holidays, sick leave, bereavement leave, marriage leave, maternity leave, paternity leave, and leave for voluntary blood donation, electoral registration, military service, court proceedings, and university exams, when applicable.
• 13th-month salary. Employees in Brazil who have worked for an employer for 12 calendar months are entitled to an additional, 13th payment of their monthly salary (sometimes called a Christmas bonus).

Additional entitlements that may be required depending on your company's or employees' circumstances include:

• Transportation vouchers
• Daycare assistance

Additional benefits, like private health insurance, aren't required but are still commonly offered to help employers attract top talent in Brazil. Read our full guide to employee benefits in Brazil to see what's required—and how you can go above and beyond to take care of your employees in Brazil.

Managing remote employees’ computers and apps

The rise of remote work has made global employment easier (and more common) than ever. But it isn't without challenges. Chief among them are the logistical problems around managing company devices for remote hires—especially across borders.

Keeping track of assigning, shipping, configuring, and updating remote employees' devices is a huge logistical lift. But with Rippling, you can:

• Quickly set up and secure employees' accounts, ensuring they have all the apps, access, and permissions they need right from their first day.
• Set up, manage, and disable all employee apps—like Slack and Google Workspace—from a single dashboard.

Learn more about how Rippling makes it easy to set up and manage employees' apps and devices in our guide to remote device management.

Protecting company IP in Brazil

It can be risky to give employees access to sensitive company information and intellectual property (IP). Considering that piracy is a common and pervasive issue in Brazil, it's even more important to take the right steps to protect your company's IP when hiring there.

In Brazil, companies are responsible for protecting and enforcing their own IP rights, and in most cases, an employee or contractor owns any IP they create—unless t​hey have a contractual duty to assign IP rights to their employer.

Learn more about how to ensure IP is assigned correctly and other important considerations for protecting your company's IP in our beginner's guide.

Complying with Brazil labor laws

When you hire across international borders, there are many moving parts—and that includes navigating Brazilian labor laws. Failure to comply with all of Brazil's local laws and regulations could result in exorbitant fines and penalties.

There are many important regulations to stay on top of, and you can read about them in our guide to labor laws in Brazil. Here are a few highlights:

• At-will employment exists in Brazil, but employees who are terminated are generally still entitled to severance pay, notice periods, accrued benefits, and other entitlements.
• Brazil has strong anti-discrimination protections. Employers cannot discriminate against anyone based on gender, race, place of origin, marital status, color, age, family status, certain medical conditions (including pregnancy), or criminal history. Even running certain background checks (like a criminal record check) could violate Brazil's anti-discrimination laws.
• Unions are common, and collective bargaining agreements (CBAs) help define working conditions, including when and how an employee's salary is increased, additional benefits on top of those required by law, working hours, and more.

Terminating employees in Brazil

In Brazil, many employees can be terminated at any time and for any reason, provided their employer follows rules for notice periods (or payment in lieu) and severance pay. The rules depend on whether the employee is in their probation period and the reason for termination.

Certain types of employees are protected from termination, including:

• Pregnant employees.
• Employees who had a work-related illness or injury.
• Union leaders leaving their posts.
• Employees elected as In-House Accident Prevention Commission members leaving their posts.
• Employees who are one year or less away from retirement.

Failing to comply with termination requirements in Brazil could result in legal action and back payment of severance and accrued benefits. Learn more in our complete guide to terminations in Brazil.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.