Minimum Wage
The Brazilian constitution provides for a single national minimum wage which enables workers and their families to meet their basic living needs like housing, food, education, health, leisure, clothing, hygiene, transportation and social security with periodical adjustments to maintain the purchasing power of people. It also allows fixing minimum wages/base salary keeping in view the extent and complexity of work (sectoral or occupational as well as regional minimum wages allowed).
Minimum wage is minimum amount due and paid directly to the worker, including rural workers, without any distinction of sex, for regular day of work, which enables workers in every region of the country to satisfy their basic needs of food, housing, clothing, hygiene/health and transportation.
Under a new law, minimum wage is decided by the government alone through a decree thereby determining the hourly, daily and monthly minimum wage for workers for whom wages are not fixed through a federal law or collective bargaining agreement.
The minimum wages can be set differently for different occupations and regions keeping in view the federally set minimum wage work as a floor. Minimum wages may be paid in kind however the in-kind portion cannot be greater than 70% of the minimum wage set for region, zone or sub-zone. Those working in hazardous conditions (electricity or with fuels or other flammable materials) are entitled an additional 30% pay on their base salary. Workers are also entitled to either 10% or 20% or 40% premium on minimum wage depending on the degree of unhealthiness and danger for working in unhealthy working conditions.
Compliance with the Labour Code, including minimum wage provisions, is ensured by the labour inspectors. Non-compliance with minimum wage provisions is punishable offence and a fine of R$ 52,000 is imposed. The fine is doubled in the case of repeat offence.
Law nº 13.467 of 13 July 2017 known as Labour Reform, has brought many changes to the Labour Code. In what concerns minimum wage, the Labour Reform opens the way for an employee to be paid less than a minimum wage. This may happen provided the employee is working less than the maximum workday of 8 hours. Anyway, the value paid per working hour must be respected. Labour Reform Code rules that suppression or reduction of the minimum wage cannot be agreed in a collective based agreement.
Provisional Measure 936 of April 1st. 2020, converted into Law 14. 020 of July 6, 2020, rule that during the crisis, employers were authorized to either suspend the labour contract or reduce working hours in 25%, 50% and 75% , in proportion to the reduction of working time established in article 5 , ruling also that workers would be entitled to a benefit to compensate for the reduction or loss of the wage, in an amount up only to the highest unemployment benefit permissible, to be paid by the Federal Government.
Source: §7(IV) of the Constitution of Brazil, last amended in 2016; §76, 82, 120 & 192-193 of the Consolidated Labour Laws (Law No. 5.452 of 1943); §01 of Supplementary Law No. 103/2000; Law No. 12.382 of 2011
For updated minimum wage rates, please refer to the section on minimum wage.
Regular Pay
In accordance with the Consolidated Labour Laws, wage period can't be longer than one month, except with regard to commissions, percentages and bonuses. When the wage period is one month, workers are to be paid their wages within five (5) days at the end of the month. Wages may be paid in cash or in kind. Wages are paid on a receipt signed by the employee or through fingerprint/thumb expression if the employee is illiterate. Wages are to be paid on a working day and in the working place during the working hours or immediately at the end of working except when deposited in the bank account.
Workers are provided an additional salary each year. The 13th salary is a gratification equivalent to a month salary and paid in two installments. It is paid in November and December.
The Labour Law Reform brought a change in the composition of the salary. Previously, Section 457 of the Labour Code Section 457 ruled that agreed gratifications, commissions, percentages, per diem and such variable side remunerations were integral part of the salary. The Labour Law Reform now rules that all these side variable remunerations are no longer part of the salary, therefore must be excluded from the quantum that is levied both as taxes and as social security dues.
Source: §459 & 763-467 of the Consolidated Labour Laws (Law No. 5.452 of 1943)
Reforms Related to COVID-19
It was allowed to suspend the payment of the FGTS by employers, including fines and charges when payment was due, and the outstanding balance could be paid in up to six monthly instalments.
