Labor laws in Brazil: how to hire employees in compliance

Hiring employees in Brazil requires strict observance of the provisions of the Consolidação das Leis do Trabalho (CLT – Consolidation of Labor Laws), pursuant to Decree-Law No. 5,452/1943. In an analysis referenced in November 2026, corporate compliance depends on the correct formalization of the employment bond, reporting hiring within the applicable deadlines and legal annotations, and fulfilling ancillary obligations related to Occupational Health and Safety (SST – Saúde e Segurança do Trabalho). It is important to emphasize that the existence of a written contract, in isolation, does not determine the nature of the legal relationship if daily practice demonstrates elements of an employment bond. Furthermore, no contractual clause may be used to reduce or suppress rights provided for in mandatory legal statutes.

Characterizing Elements of the Employment Relationship

According to Article 3 of the CLT (per the current wording), an employee is considered to be any natural person who provides services of a non-occasional nature to an employer, under the latter's dependence and for a salary. The characterization of the bond depends on the concomitant presence of four pillars: personality (pessoalidade - the work must be performed by the hired person), onerousness (onerosidade - financial compensation), habituality (habitualidade - continuity or expectation of return), and legal subordination (subordinação jurídica - subjection to the employer's directive, regulatory, and disciplinary power). According to Article 9 of the CLT, acts performed with the objective of distorting, preventing, or defrauding the application of the precepts contained therein shall be null and void.

Social Security Obligations and Social Charges

Hiring under the CLT regime imposes charges that vary according to the company's tax regime (such as Simples Nacional, Lucro Presumido, or Lucro Real). The main financial and social obligations include:

1. FGTS (Severance Indemnity Fund): Monthly deposit according to legal bases and rates, generally 8%, with special cases such as apprentices.
2. Social Security Contribution (INSS): Collection of employer shares and employee deductions, varying according to the salary bracket and the company's RAT/FAP code.
3. Vacation and Constitutional One-Third: The right to 30 days of paid rest after every 12-month period of the contract's duration.
4. 13th Salary: Christmas bonus paid proportionally to the months worked in the calendar year.
5. Transportation Voucher (Vale-Transporte): Provision of residence-to-work commuting, with the possibility of a deduction of up to 6% from the base salary.

For companies enrolled in Simples Nacional, the optimization of these costs may depend on specific criteria, such as Payroll in Simples Nacional: CPP, Annex IV and factor R without shortcuts.

Economic Groups and Joint Liability

Labor compliance also covers the company's corporate structure. According to Article 2, § 2 of the CLT, companies that, although possessing their own legal personalities, are under the direction, control, or administration of another, shall be jointly liable for labor obligations. According to the reform introduced by Law 13,467/2017, the mere identity of partners is not sufficient to characterize an economic group; it is essential to demonstrate integrated interest, effective communion of interests, and the joint action of the companies. Structuring governance under Corporate legal certainty: tax governance, contracts and labor is essential to avoid risks of succession or unexpected joint liability.

Outsourcing and Law 6.019/74

Law 6,019/1974 allows for the hiring of outsourced services, including for the company's core activities. However, the contracting company has subsidiary liability for the failure of the service provider to comply with labor obligations. Constant inspection of the financial suitability and fulfillment of charges by the supplier is mandatory. When there is the use of Outsourcing and B2B contracts: requirements and risks of hiring PJs (Legal Entities), the hiring company must ensure that direct subordination and personality are not established with the provider's employees, under risk of judicial recognition of a direct bond.

Time Tracking and Occupational Health (SST)

Article 74 of the CLT determines that, for establishments with more than 20 workers, the recording of working hours (entry, exit, and breaks) is mandatory and can be done by suitable manual, mechanical, or electronic means. In parallel, Occupational Health and Safety (SST – Saúde e Segurança do Trabalho) events must be updated periodically via eSocial. This includes risk monitoring and medical examinations (admission, periodic, and dismissal), which are fundamental to certify the worker's integrity and prevent liabilities related to occupational diseases or accidents.

Frequently Asked Questions (FAQ)

Does a service provision contract avoid the CLT bond?

Not necessarily. If in practice the worker acts with subordination, habituality, onerousness, and personality, the court may disregard the civil contract and declare an employment bond based on the principle of the primacy of reality.

What is the impact of an economic group on the payroll?

The characterization of an economic group generates joint liability (responsabilidade solidária). This means that if one company in the group fails in its labor obligations, the others can be sued to pay the debts of another's employee.

What are the risks of poorly managed outsourcing?

The main risk is subsidiary liability, where the service taker pays labor verbas if the provider is insolvent. In addition, if there is direct command over the outsourced employee, there is a risk of recognition of a direct bond with the taker.

How do collective agreements (CCT) work?

Collective agreements (CCT – Convenções Coletivas de Trabalho) are agreements between employers' and workers' unions that establish specific rules (such as floor salaries, benefits, and working conditions) that must be followed by companies in that territorial base, often prevailing over the law on specific points, within the limits of Art. 611-A of the CLT.

Next Steps

To ensure compliance, review the application of Payroll in Simples Nacional: CPP, Annex IV and factor R without shortcuts and the processes of Outsourcing and B2B contracts: requirements and risks of hiring PJs (Legal Entities). Constant consultation of legislative and regulatory updates from the Ministry of Labor and Employment is recommended.

Legal Disclaimer: This article is for informational purposes only and does not constitute individualized legal or accounting advice. The application of labor laws depends on the specific circumstances of each case and the date of analysis. This content has not undergone expert legal review for specific cases.

To advance in the decision, continue through the sequence of subjects:

• Payroll in Simples Nacional: CPP, Annex IV and factor R without shortcuts
• Outsourcing and B2B contracts: requirements and risks of hiring PJs (Legal Entities)
• Corporate legal certainty: tax governance, contracts and labor

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Official sources

• CLT
• Law 6.019/1974