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                    Employment and Work Laws and Regulations are defined by the Federal Constitution, CLT (Labor Code), some specific Laws, 2ª Jurisdiction Judgment from the Labor Tribunal and by the Collective Bargains.

                    An employment relation requires some special characteristics such as:

• Individuality: person relation;
• Regularity: it has to have constancy in the work relation
• Submission: it is essential to define an employment relation. The employee must follow and obey instructions and rules
• Remuneration: it has to have payment

                    Different from employment, the work relation varies from one to another, depending on the type and its law. Usually one of the requirements above listed is missing or it is different; however the amount of expenses of the employer does not change dramatically.

                    An autonomous worker is one who renders services on an independent basis, both as to terms and performance. He/she acts for him/herself, determining his/her own activities, developing his/her own business, as his/her own master, since there is no subordination relationship, and he/she is not subject to the authority of any third party.
 
                     The different types as their features as well as their consequences can be shown herein by the following chart:
 
 
 

Work Relations		Features	Law and Consequences
1. Employment Relation			- CLT (Labor Code)
1.ER	Certain Period	- up to two years - The nature of the services justifies establishment of a predetermined period of time; or the nature of the company's activity is temporary; or if it is a probation contract that can not exceed 90 days. - less expensive in labor charges	- No prior period - No indemnity is payable to an employee on termination of his/her employment after expiration of a fixed-term contract. - FGTS 2%
	Uncertain Period	- any period time	All rights listed below
2. Temporary		- only in extraordinary situations - the employee must be contract from an employment agency  - no more than 3 months	- Law n. 6019/74
3. Avulse		- no regular labor charges - Unions must intermediate	- Law n. 612/92
4. Eventual		- for irregular jobs - no regular labor charges
5. Rural		- all rural activities	Law n. 5.889/73
6. Autonomous		- no regular labor charges - only in urban work

                    A formal written agreement is not necessarily required under Brazilian law for employment of an employee. Oral employment is fully valid.

                    In any case the employer must:

1. register the new employee in his/her work ID;
2. notice the employee at the company’s payroll list (RAIZ) at Labor Police Department;
3. Pay the FGTS for the employee;
4. Pay Social Security Contributions;

                    The termination of an employment contract may occur by "fair or unfair reason" by decision of the employer or by decision of the employee.

                    The dismissal of an employee for fair reason may only occur where it results from one of the following acts of the employee:

                    a) dishonesty;

                    b) improper conduct or lack of self-restraint;

                    c) regularly doing business on his/her own account or for the account of a third party without the employer's permission, or when the activity is in competition with the employer's business or adversely affects the quality of the employee's work;

                    d) criminal sentencing of the employee, in final judgment, provided that execution of the penalty has not been suspended;

                    e) sloth in the execution of his/her duties;

                    f) intoxication during working hours;

                    g) violation of trade secrets;

                    h) any act of disrespect of rules;

                    i) abandonment of employment;

                    j) any act of violence or any act injurious to the honor or reputation of any person, except for self-defense, or defense of a third party; or

                    l) constant gambling.

                    If the employee act is not so serious, the employer shall notice each bad act. Usually is accepted 3 notices to fire the employee for non serious acts. "Fair Reason" dismissal will entitled the employee only to the outstanding salary, accrued vacation and 13º salary.

                    On the other hand, if the dismissal is not by "fair reason", or if the employee quit, he/she shall have the following rights:

1. 30 days' prior notice;
2. outstanding salary for the days worked during the month;
3. Proportionate 13th salary;
4. One-third bonus in respect of vacation;
5. Release of the FGTS deposits, with a fine of 40% of the total amounts deposited in the employee's FGTS account (except if the employee quit)

                    Anyhow, it will always be necessary the employee's Labor Union approval of the employment contract termination, if the contract exceed one year.
 
 

                    Minimum wage: The minimum wage in Brazil is up from (R$120,00) US$ 101,69. Usually each type of employment relation will have its own minimum wage that is set up by collective bargains trough the Union. The salary can be set up by hour, day, week, month, by each job or commission and it can ever be cut down.

                    Other payments attached to the salary:

1. 13º salary: It is one more salary paid in December that must be in the same amount of the usual month salary. If the employee were working less than one year, the amount of it would be proportional.
2. Nighttime salary: the salary from nighttime work is 20% higher for urban and 25% for rural employees.
3. Overtime: The employee that works more than 8 hours by day or 44 hours by week has the right to receive overtime payment which is 50% higher than regular hours. Some specific jobs require less working time (6 hours) and higher overtime payment.
4. Danger or Risky Activities Addiction: the salaries from work which activities are considered risky are added 30%.
5. Vacation: One month of vacation for each worked year. This period the employee receives his/her salary plus 1/3 (33.33%).

                Father’s Allowance Period: When the child is born the father has the right to stay 5 days without working, and receiving his total salary.

                FGTS- Unemployment Compensation Fund:Every month the employer discounts from the employee salary 8% and deposits it at the employee social security count. This amount shall be received when the employee is faired "without fair reason" (requirements are mandatory and settled by Law).

            Prior Notice Period: whenever the employee wants to quit or employer wants to fairer, the employee shall work more 30 days, with one hour less a day, to have time to look for other job.

             Retirement: Now the employee can retire when he or she achieves 35 or 30 years of work, respectively or if he is 65 years old and she is 60. A new bid is to be approved by the Congress and both requirements above said will be necessary. The Social Security department pays it to the employee.

                Pre-School for all children under 6 years old

                Unemployment Salary: When the employee is dispensed without "fair reason" (requirements are mandatory and settled by Law) the employee has the right to receive the unemployment salary for 4 months. The Social Security Department will pay it.

                Family Salary: every employee that has children has the right to receive an additional value.

                Recognition of all Collective Bargains as Labor Laws: This is very important to the employer and employee, because every year the Bargain will settled right and duties between the relationship.
 
 

                    The Federal Constitution protects the freedom of association employees and also for employers. Unions represent the interests of its members as a group or individually and may also enter into collective bargaining. After the representative unions for the professional and economic categories sign these instruments, the employer must comply with its clauses since they are enforceable as law. The enforcement applies even if the members are not membership.
 
 

                    Social Security in Brazil is made up of monthly contributions by employees, employers and the Government. These payments to Brazilian Social Security Department- INSS entitle the employee to receive social security benefits.

                    Please see this section on taxation

                    Agency or Representation in Brazil is ruled by Law nº 4886/65. The agent herein is the independent agent and he/she can be either a juridical entity (company) or individual. Nevertheless, the agent will establish relations between a principal and a third party.

                    An agency creates certain unique rights and duties. First of all, the agent must be registered at the Local Agency Department and its duties to the principal would be a) accounting, b) professional secrecy; c) loyalty; 5) and other duties settled in the contract.

                    The agency contract must define to both parties its rights and duties. If the indemnity is not settled in the contract it can be settled by law up to 1/15 (6.66%) of all payments from commission during the last year.

                    Liability of the principal is determined by the contract; however, as this relationship is not an employment one, the principal will not be liable for torts.

Copyright © 1999 -Revised 10/10/2000

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