Page 130 - InvestmentGuideBrasilEng

HIRING

EMPLOYEES

Benefits

Employment contracts are dealt with in the Feder-
al Constitution of 1988 and in the Consolidation of provide for minimum, mandatory employment The Federal Constitution and the CLT provide for
Labor Laws (CLT) and subsequent legislation. Labor conditions, a written employment agreement a series of minimum benefits that must be grant-
laws apply to all employees except for public ser- may specify matters such as any form of special ed by the employer to its employees throughout
vants, for whom there are separate regulations. compensation, fringe benefits, confidentiality, the employment relationship. These minimum
The legislation makes no distinction between and non-competition agreements. benefits are:
skilled and unskilled workers or between those Employment agreements are generally in
engaged in manual, office or professional work. force for an indefinite term. Employees can only
A change in the legal structure or ownership be hired for a fixed term in a few special circum- MINIMUM WAGE
of an employer does not affect the rights acquired stances, namely: (i) services whose nature or time
by employees under the labor laws. frame justifies establishing a termination date (ii)
All registered employees, including foreign- transitory business activities; and (iii) trial em- The Federal Government is responsible for estab-
ers, are required to hold a work card (Carteira de ployment contracts. lishing the minimum wage that must be paid to
Trabalho), on which the terms of employment Employers have the burden of proof of the cir- employees. No employee in Brazil shall receive
must be recorded. Employers must keep official cumstances that authorize the execution of the less than the minimum wage. The minimum
records or cards containing detailed information employment contract for a definite term. Other- wage is reviewed and adjusted every year.
about each employee, and each year they must wise, the employment relationship will be gov- Additionally, each category of workers (e.g.,
file returns listing all employees with the local of- erned under indefinite term employment con- salesmen, drivers, doctors, etc.) has a profession-
fice of the Ministry of Labor, including reporting tract rules, which are generally more favorable to al minimum wage, which shall not be lower than
the number of foreigners and minors. Companies the employee. the minimum wage established by the Federal
are allowed to employ foreign workers up to a Fixed-term agreements may not exceed two Government. Wage rates set by local labor unions
limit of 1/3 of total staff. years and may only be renewed once. A trial are typically higher than the general minimum
According to the CLT, substance is more im- agreement may not exceed 90 days. wage.
portant than form. As a consequence, a written As to contract modification practices, accord- The states may also establish a local mini-
employment agreement is not essential to prove ing to the laws, any change to employment con- mum wage by law.
the employment relationship, since it can result ditions (i) requires the employee’s express con-
from mere verbal arrangements or even from sent in writing; and (ii) must not cause any loss
implied circumstances. Nevertheless, it is rec- (financial or otherwise) to the employee.
ommended a written agreement be prepared to Disputes related to employment relationships
make the relationship clearer for the parties, be- are decided by specialist courts (Justica do Tra-
cause although the labor laws and regulations balho) which are present in all states of the country.
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