Employers of record (EORs) in Brazil: Everything you need to know
Hiring across borders offers many benefits for employers, including access to a diversified talent pool. Brazil is known for its rich supply of tech talent, including software developers. If you’re looking to expand your workforce, Brazil boasts a strong IT infrastructure, an evolving pool of tech professionals, and reliable talent available for reasonable rates.
With that in mind, hiring remote workers isn’t always easy. In fact, as with many countries, hiring internationally in Brazil introduces many complexities that can make administrative efforts like payroll, tax preparation, and employee onboarding more challenging. With the complications involved in setting up an entity, many employers look instead to employers of record (EORs) in Brazil.
EORs in Brazil
An EOR is an organization that acts as an employer for legal and tax purposes, which allows you to conduct business legally overseas. EORs mostly perform human resources and legal functions, managing essential aspects of employment—like payroll, taxes, compliance, and benefits—for your remote workers. These third-party organizations allow you to hire workers in global markets quickly and efficiently.
By leveraging an EOR in Brazil, you can tap into this diverse talent pool without the hassles that typically come with global employment. Oyster simplifies hiring across borders by managing all the aspects of employment on your behalf, including:
- Compliance with local laws
- Time off management
Talk to one of our advisors today to find out how our global employment platform can help you onboard team members in Brazil.
A few things to know about hiring in Brazil
Hiring in Brazil requires knowledge of the Brazilian employment law, which regulates labor unions and employee agreements in the country. To navigate the regulatory landscape, many employers opt to work with an EOR. Brazil’s employment laws have several key elements.
If you’re terminating an employee, the process can be time-consuming and costly. Notice periods start at 30 days but are longer if employees have been working for you for over a year. If the termination takes place under mutual consent, the notice period can be reduced. Termination costs must include severance pay. Unjust dismissals may result in harsh penalties for employers.
The Brazilian work week is limited to eight hours per day and 44 hours per week (for those working more than five days). Subject to limited exceptions, any additional hours worked past eight hours are considered overtime, and call for compensation of 150% of the regular pay rate. Working on holidays requires 200% of the employee’s regular pay, and higher rates may be established in applicable collective bargaining agreements. Overtime cannot exceed two hours per day.
Certain positions are exempt from overtime requirements, including professionals who occupy a position of trust, such as a manager or supervisor. Certain sales employees who work outside the office may also be exempt.
Paid holiday structure
In Brazil, employees receive a holiday of 30 days after 12 months of employment. They must take the holiday within the following 12 months. If the vacation isn’t taken within the next year, the employer must pay the employee a penalty corresponding to the vacation payment and give them the right to carry over their vacation the following year. The vacation may be split up into a maximum of three stretches, one of which must be at least 14 days, with the other two spanning at least five days.
Employees also receive a vacation premium, or holiday bonus, equal to a third of a month’s salary. In addition, employers must provide a 13th month’s salary bonus equal to one month of pay, which is paid out in two parts: one half is due by November, and the other by December 20th. A collective bargaining agreement may modify these payment dates.
Additional paid time off
Employers must pay an employee’s sick leave at 100% of their salary for the first 15 days. After that, social security administers sick pay.
Additionally, Brazilian employees can receive 120 days of maternity leave, paid at their full salary rate by the employer. The employer may be reimbursed through social security payment deductions. Employees may also receive five days of fully paid paternity leave. Employers enrolled in the government scheme can offer a maternity leave of up to 180 days or paternity leave of up to 20 days. After these initial periods are complete, parents may take another 32 weeks of leave shared between both parents, though they’ll receive a lower monthly pay.
Employers can issue non-compete agreements that remain in effect for a maximum of two years. The terms must be clearly spelled out and are enforceable by employers, if reasonable in scope, in return for the payment of compensation to the employee, which may vary based on circumstances.
Other things to consider
As in the US, there are other considerations for severance pay, taxes, and other aspects of employment. Find out more about hiring in Brazil in our complete guide.
How much does it cost to hire in Brazil?
Check out our cost of hiring in Brazil tool to get an idea of how much tax you and the employee might have to pay on top of salary payments.
How can Oyster help onboard team members in Brazil?
No matter where in the world you’d like to hire, Oyster can make it easy with our contractor management tools. We eliminate the hassle of onboarding, payments, and paperwork, so take some time to learn more about our global hiring tools.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.