Employers and workers must make compulsory contributions to the Brazilian Social Security Agency, which is in charge of managing a system designed to protect the employee in case of illness and retirement. With regards to healthcare, despite the fact that employers are not obliged to grant private healthcare to their employees, it is a very common practice.
The employer’s contributions average twenty-seven percent (27%) of the employee’s overall salary. Contributions may be higher than this average if the employees are subject to health hazardous working conditions. Companies in some specific industries are subject to a 1% or 2% social security contribution on top of their revenue instead of the employees’ salary. The employer withholds the employee’s individual contributions.
The individual contribution is proportional to the salary amount and is capped by the Federal Government, currently at approximately BRL 855.00 per month and adjusted on an annual basis. For different labour structures which are not employment, other mandatory social security schemes may apply.
Healthcare and Insurances
The social security authority provides the following insurances to workers who have contributed to the system, which will depend on the number of contributions made and on the amounts involved in each contribution. The main insurances provided by the social security authority are: 1) death allowance; 2) accident allowance; 3) disease allowance; and 4) imprisonment allowance.
Holidays and Annual Leave
Employees are entitled to be absent from work on public holidays as established by law to celebrate some special occasion (e.g. Christmas, Independence Day, etc.), being entitled to the regular remuneration for such days. Local (Municipal or State) holidays may also apply, depending on where the company is based. If the employer demands the employee to work on a holiday, the remuneration paid with respect to the worked holiday must be at least double the regular compensation. Applicable collective bargaining agreements may establish a higher rate for the holiday remuneration.
After each period of 12 months worked, employees are entitled to a 30 calendar-day paid vacation, which must be taken within the subsequent period of 12 months, in the period that is most convenient to the employer. The Labour Reform allows the split of the vacation period, provided that the employee agrees. The vacation period can be taken in up to three periods, one of which cannot be less than 14 days and the others cannot be less than 5 days each. Moreover, the vacation period cannot start 2 days before a holiday or a weekend. Additionally, note that the employee may “sell” 1/3 of his/her vacation period. The vacation remuneration corresponds to the monthly salary plus 1/3 of the employee’s monthly salary as vacation bonus.
Maternity and Paternity Leave
All female employees are eligible for maternity benefits, including when adopting a child. The maternity benefit will be paid to the employee for a period of 120 days and is paid by INSS, the Brazilian social security agency. In practical terms, the employer pays the benefit to the employee and deducts the amount from the social security contributions due to the INSS. Male employees are entitled to 5 days of paid paternity leave. If the company is enrolled in a government program called “Empresa Cidadã”, the maternity leave may be extended to 180 days and the paternity leave to 20 days, provided some requirements established by the government program are observed.
Sickness and Disability Leave
In the event of sickness leave, the employer will be responsible for the employee’s salary during the first fifteen days. After the fifteenth day of absence due to sickness, the INSS will pay a sick leave benefit to the employee. However, the benefit does not correspond to the actual salary, but rather to a specific INSS based calculation made over the last contributions and is capped at approximately BRL 6,100.00. In the event of an injury at work, the employer will be responsible for the employee’s salary during the first fifteen days.
Pensions: Mandatory and Typically Provided
According to the new rules (effective 13 November 2019), to be eligible to receive the retirement pension, male individuals must be at least 65 years old and have paid a minimum of 240 monthly contributions to INSS. Females must be at least 62 years old and have paid a minimum of 180 monthly contributions to INSS. In addition, retirement is no longer based solely on the length of service; nowadays individuals must have met the minimum age mentioned above to be eligible for the retirement pension.
There is also a special retirement for employees who have worked under unhealthy conditions; their contribution periods are shorter than the regular period. A company that has employees working under unhealthy conditions that entitle them to the special retirement, must pay additional social security contributions. The additional contribution is 6%, 9% or 12% of the employees’ salary, depending on the level of the risk.
Disability pensions are also available to workers who have become disabled due to work related illness or accident. A Social Security medical expert must document such disability and the beneficiary must be subject to regular exams. The benefit payments end when the employee recovers his/her ability to work.
Apart from the aforementioned public retirement system, some companies provide their employees with a private pension plan, in which the amounts of the contributions from both parties (employers and employees), can be defined by the companies directly, subject to specific rules in Brazil as issued by the government agency Superintendência de Seguros Privados (SUSEP).