Brazilian vs Czech employment law

Key differences between Brazilian and Czech employment law

When entering the Brazilian labour market, it is crucial to understand that local employment law is among the strictest in Latin America. While Czech law allows a certain degree of contractual flexibility, Brazilian legislation places an extreme emphasis on protecting the employee as the weaker party.

Brazilian law consistently applies the lex loci laboris principle, meaning that employees working in Brazil are subject to Brazilian rules regardless of where the contract was signed. If a Czech company posts an employee to Brazil or hires a local worker there, it cannot simply rely on the Czech Labour Code.

Whereas in the Czech Republic employment can be terminated by notice with a two-month notice period, in Brazil dismissal without a disciplinary reason is considered a unilateral act that must be financially compensated. In addition, Brazil’s labour court system is set up so that the burden of proof often lies with the employer.

Employment contracts: Form and content

In the Czech Republic, the written form of an employment contract is mandatory, and its absence may result in a fine from the labour inspectorate of up to CZK 10 million for enabling illegal work.

Although a written contract is the standard, in Brazil an employment relationship may also arise orally or implicitly through the actual performance of work. Brazilian law applies the principle of the “primacy of facts”, so if a person in fact works under your direction, an employment relationship arises with all consequences even without a signed contract.

A key obligation in Brazil is registering the employee in the work booklet (CTPS), which is now predominantly digital, and in the eSocial system. This system centralises tax, employment-law and social information, and the registration must be completed within 5 business days of the start date.

An employment contract in Brazil must be in Portuguese, because an English or Czech version without an official translation is practically unusable before a Brazilian court. Bilingual versions are possible, but in the event of a dispute the Portuguese wording is always decisive.

The probationary period in Brazil differs from the Czech one. While in the Czech Republic it is typically a maximum of 3 months, in Brazil a so-called “trial contract” (contrato de experiência) is agreed, which may last a maximum of 90 days.

Working hours and overtime

The standard work week in Brazil is 44 hours, which is 4 hours more than in the Czech Republic. Typically, people work 8 hours Monday–Friday and 4 hours on Saturday, or the Saturday hours are spread across the work week.

Keeping records of working hours in Brazil is mandatory for companies with more than 20 employees, and the rules are extremely formal. Overtime work in Brazil is paid with a premium of at least 50%, while work on Sundays and public holidays is paid with a 100% premium.

An important difference lies in mandatory rest. In Brazil, an employee must have at least 11 hours of rest between two shifts. The lunch break must be at least 1 hour when working more than 6 hours.

If the employer does not provide the full lunch break, they must pay the missing time as overtime with a penalty uplift.

Benefits and social security

“Custo Brasil” is a term referring to the high operating costs associated with doing business in the country. Payroll costs in Brazil are burdened with contributions that have no direct equivalent in the Czech Republic or are significantly lower there.

Social insurance and mandatory contributions

In Brazil, the employer pays, in addition to gross salary:

• INSS (Social insurance): The base rate is 20% of gross salary.
• RAT (Occupational accident risk): 1% to 3% depending on the risk level of the industry, multiplied by the FAP coefficient.
• Third-party contributions: Approx. 5.8% (e.g., to education funds such as SESC, SENAI).
• FGTS (Guarantee Fund): The employer must deposit 8% of gross salary into the employee’s restricted account.

In the Czech Republic, the employer pays a total of 33.8% in contributions. In Brazil, the total is around 35–37%, and additional mandatory costs related to benefits and funds also apply.

Mandatory benefits

• 13th salary: Mandatory by law, paid in two installments.
• Vacation: Entitlement to 30 calendar days after one year of work. When the employee takes vacation, the employer must also pay a bonus equal to 1/3 of the monthly salary.
• Transportation: The employer must contribute to commuting costs if the employee requests it.
• Meal allowance: Not mandatory by law, but the vast majority of collective bargaining agreements require it.

Termination of employment

In the Czech Republic, dismissal is tied to statutory grounds and involves severance pay of 1–3 months’ salary. In Brazil, the process is different and significantly more expensive.

In Brazil, an employer may terminate employment at any time without stating a reason, but this step is associated with high financial costs. The costs include an FGTS fund penalty of 40% of the total accumulated amount, a notice period of at least 30 days, and payment of benefits including the proportional part of the 13th salary.

Immediate dismissal for gross misconduct is possible, but the burden of proof lies entirely with the company. If the employer does not prove fault with strong documentation, the court will invalidate the dismissal and order payment of all compensation.

Pregnant women have absolute protection against dismissal from conception until five months after childbirth. Union leadership members and employees returning after a workplace accident are also protected against dismissal for 12 months after returning to work.

Social security agreement between the Czech Republic and Brazil

On 1 November 2023, the Social Security Agreement between the Czech Republic and the Federative Republic of Brazil entered into force. This agreement is essential for secondments and for preventing double payment of social security contributions.

The agreement allows a Czech employee seconded to Brazil to remain insured under the Czech social security system and not pay contributions in Brazil. The standard secondment period is up to 24 months, with the possibility of an extension based on an agreement between the authorities.

For a secondment, it is necessary to obtain the CZ/BRA 101 form from the Czech Social Security Administration (ČSSZ). Without using this agreement, a Czech company would have to pay high Brazilian social insurance contributions for the seconded employee from day one.

Work visas and permits

A Czech citizen cannot work in Brazil on a tourist visa. For legal work, it is necessary to obtain a residence permit for employment purposes, which typically requires an application by a Brazilian entity.

Brazilian companies must comply with a proportionality rule under which two-thirds of employees must be Brazilians if the company employs three or more people. The visa process usually takes 30–60 days, and after arrival the foreign national must register with the Federal Police.

Tax aspects

There is a Double Taxation Treaty between the Czech Republic and Brazil, the current status of which is maintained by the Ministry of Finance. Employment income in Brazil is generally taxed in Brazil if the employee stays there for more than 183 days.

Personal income tax in Brazil is progressive, with a maximum rate of 27.5%.

Employing people in Brazil is administratively demanding and more costly than in the Czech Republic. The combination of high contributions, the 13th salary, the vacation bonus, and the 40% penalty upon termination may come as an unpleasant surprise to Czech managers.

The foundation of safe expansion is prevention, including high-quality bilingual contracts, strict working time records, and use of the bilateral social security agreement.

ARROWS advokátní kancelář has experience in international employment law, and through the ARROWS International network we can help you set up processes to minimize risks.

If you are planning to expand into Brazil, contact us at consultation@arws.cz for an expert consultation.

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• Flexible Employment in the Czech Republic: Legal Pitfalls and Compliance Risks
• Contractor vs Employee in 2026: Avoiding Tax Risks in Czechia
• Summary Termination of Employment: Legal Requirements and Employer Risks