Brazilian vs Czech employment law Key risks and obligations for employers

Mgr. Vojtěch Sucharda
Mgr. Vojtěch Sucharda
2.4.2026 | ARROWS law firm

If your Czech company plans to employ workers in Brazil or cooperate with Brazilian partners, you need to understand the fundamental differences between Brazilian and Czech employment law. The Brazilian system is significantly more protective of employees, which brings Czech companies new obligations, higher costs, and potentially serious legal risks. In this article, you will learn what to watch out for in practice, how employee benefits differ, and how to avoid crippling fines.

The photograph shows a specialist consulting on differences in employment law.

Quick summary

  • Brazil’s CLT is significantly stricter than Czech legislation. It requires more mandatory benefits and does not recognise the concept of termination without cause without financial compensation, as we know it to some extent in Europe.
  • Social security and taxes in Brazil make labour more expensive. The employer pays approx. 20% in social insurance (INSS), plus 1–3% accident insurance (RAT), approx. 5.8% third-party contributions, and 8% into the FGTS fund.
  • Termination without cause is costly. If you dismiss an employee without a serious disciplinary reason, you must pay a penalty equal to 40% of the total balance of their FGTS fund and pay out the notice period.
  • Working hours and overtime differ. Brazil has a standard 44-hour work week, and overtime rules are strict; failure to pay overtime often leads to litigation.

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.

Related questions on the key differences

1. Which legal regulations govern employment law in Brazil and in the Czech Republic?
In Brazil, primarily the Constitution and the CLT (Consolidação das Leis do Trabalho). In the Czech Republic, Act No. 262/2006 Coll., the Labour Code, and Act No. 435/2004 Coll., on Employment. In both countries, collective bargaining agreements also play a role; in Brazil they often have the force of law.

2. Does Brazilian law also apply to Czech employees posted to Brazil?
Yes. If a Czech company posts a worker to Brazil, mandatory provisions of Brazilian law apply to them if they are more favourable to the employee than Czech law. Exceptions in the area of social security are addressed by a bilateral agreement effective from 1 November 2023.

3. What happens if a Czech company ignores Brazilian regulations?
There is a risk of high fines from the labour inspectorate and almost certain losses in disputes before Brazilian labour courts. These courts may order enforcement against the company’s assets in Brazil, and in extreme cases liability may also extend to shareholders or managing directors.

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.

Related questions on Brazilian employment contracts

1. Must a Brazilian employment contract be in English if I work for an international company?
Definitely not. For legal effectiveness in Brazil and registration in eSocial, Portuguese is essential. The English version serves only to inform headquarters.

2. What is the difference between the Czech and Brazilian probationary period?
In the Czech Republic, the probationary period is a clause within the contract. In Brazil, it is a specific type of fixed-term contract (max. 90 days) that automatically converts into a full employment relationship if it is not terminated.

3. Is it safe to hire contractors in Brazil as self-employed (so-called “PJ”)?
It is very risky. Brazilian courts often reclassify this relationship as employment if they find elements of subordination and regularity. The company must then pay all contributions, vacation and 13th salaries retroactively, including high penalties.

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.

Related questions on working hours

1. Can I agree on a flat salary in Brazil that includes overtime?
Generally, no. Including overtime in a flat salary is risky and courts often do not recognize it. An exception applies to managerial positions where overtime is not tracked, but the salary must be at least 40% higher than that of subordinates.

2. What are the risks of incorrect timekeeping records?
If an employee claims in court that they worked overtime and the company fails to produce credible records, the court will automatically accept the employee’s claim.

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.

Risk

How ARROWS can help (office@arws.cz)

Incorrect FGTS contributions: FGTS debt prevents the company from obtaining a tax clearance certificate (CND), and upon termination the debt becomes more expensive due to penalties.

We will arrange a review of FGTS and INSS calculations and payments to ensure the company is not in default.

Failure to pay the 1/3 vacation bonus: A common mistake made by foreign companies. It results in an obligation to pay double.

We implement correct procedures for vacation calculations in line with Brazilian rules.

Errors in eSocial: Data inconsistencies in the eSocial system lead to automatic fines.

We can assist with setting up reporting to eSocial.

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 office@arws.cz for an expert consultation.

FAQ – Frequently asked questions

1. Can a Czech company employ someone in Brazil directly under its Czech company registration number (IČO)?
No. Direct employment by a Czech company without a branch in Brazil is complicated. Invoicing under a Czech company registration number (IČO) by a Brazilian resident is risky from the perspective of disguised employment.

2. How high are the total employment costs in Brazil?
Expect a multiplier of approximately 1.6 to 1.8 times the gross salary. If you offer an employee BRL 10,000 gross, the real cost to the company will be BRL 16,000–18,000 per month after including all mandatory costs.

3. How long does it take to obtain a work visa?
The entire process—from the company’s application in Brazil to the visa being affixed to the passport in Prague—usually takes 2 to 3 months.

4. Is electronic timekeeping mandatory?
For companies with more than 20 employees, it is mandatory. However, we recommend electronic records even for smaller teams as protection against overtime disputes.

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic based on the legal framework as of 2026. Although we strive for maximum accuracy, legislation and its interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for the maximum protection of our clients we maintain professional liability insurance with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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