When determining the best way to hire an individual in Brazil, the company should establish if the relationship it intends to have with the individual would be more likely to be considered an employment or an independent contractor relationship, based on the concrete elements of the actual relationship to be established.
The employment relationship is characterized by four elements, specifically:
- services rendered on a personal basis;
- with subordination; and
- on an onerous basis.
The independent contractor relationship should not show any characteristic of the em-ployment relationship. Facts prevail over formal documents in Brazil. If the characteri-stics of an employment relationship are present, the independent contractor may be reclassified as an employee by labor courts even if a worker is hired as an independent contractor.