Brazil: Employment & Benefits – 2024 Highlights and 2025 Outlook

This year has brought several significant updates to Brazilian labor law, with key changes focusing on equal pay, digital communication requirements, and debate over the regulation of platform work. These developments highlight the increasing emphasis on gender equality, workplace mental health, and the evolving nature of work in the gig economy. This article outlines the key highlights from 2024 and looks ahead to 2025.

2024: HIGHLIGHTS

• Equal pay has become a focal point in Brazilian labor law with the enactment of Law No. 14.611/2023, which mandates that companies with more than 100 employees publish transparency reports in the form proscribed by the Ministry of Labor, or face significant fines and penalties. These reports must detail any gender-based wage disparities, including differences in wages, benefits, and bonuses for employees in equivalent roles. Employers may also be required to implement internal policies to promote gender equality and conduct regular reviews of their compensation structures to identify and address any pay inequities. While inspections for this matter have not yet become commonplace, the first reports were made available this year, and avoiding legal risk will require compliance with the provisions of the new equal pay law.
• This year, the Electronic Labor Domicile became the mandatory platform for receiving official labor-related communications regarding the Ministry of Labor's administrative procedures. This change eliminated the use of traditional means for receiving infraction notices and notifications by centralizing and streamlining the delivery of labor-related communications. Failure to maintain proper access could result in missed deadlines or potential legal complications. Employers must adapt to this digital shift and ensure compliance to avoid the risk of missed deadlines or non-compliance.
• The Federal Supreme Court (STF) upheld the broad legality of outsourcing for core business functions in several decisions this year, rendered in the context of individual constitutional claims that challenged decisions rendered by lower-level courts. The STF clarified, however, that outsourcing cannot be used to disguise an employment relationship or circumvent workers' rights, such as vacation benefits, the 13th salary, or the FGTS (Severance Indemnity Fund). This decision emphasizes that companies that outsource must ensure that contracts are transparent and lawful, and that workers’ rights are respected, as provided under the Brazilian Labor Code. Outsourcing arrangements that are deemed as a fraud under the labor legislation, requiring individuals to establish and provide services under legal entities, could be annulled by the courts, leading to legal liabilities and potential fines.
• Regulation of platform work advanced in 2024 with the introduction of a new bill aimed at improving the rights and conditions of platform workers. Bill 12/2024 sought to create a legal framework for the platform-based independent worker category, introducing provisions such as a 12-hour maximum workday, social security contributions by both workers and companies, and a minimum wage of R$32.10 per hour worked. However, the bill faced significant criticism—particularly regarding the perceived lack of worker autonomy—and was subsequently withdrawn from the legislative agenda. In response to this, Bill 536/2024 is currently under review, and may offer a more balanced framework for regulating gig economy work, but the bill continues to raise concerns over the level of autonomy for platform workers and the transparency of platform commissions. Companies in the platform economy, such as rideshare and delivery services, should remain alert to the evolving legal landscape in order to ensure compliance with new regulations once they are enacted.
• Mental health in the workplace has been a growing focus for employers. Under the Brazilian Labor Code and health regulations, employers are required to ensure a safe work environment that addresses both physical and psychological risks, including stress and burnout. Employers have faced legal consequences from failing to support employees with mental health conditions, such as not providing necessary accommodations or resources. Mental health illnesses such as depression and anxiety have been recognized as occupational diseases, and Brazilian authorities have demonstrated further concerns regarding these issues with the enactment of Law 14,831/2024, which created a certification process for companies that promote mental health. Employers must prioritize their employees’ mental well-being, in order to avoid legal and reputational risks arising from individual labor claims and inspections from labor authorities related to mental health issues.
  
  

2025: OUTLOOK

• Union negotiations may present both challenges and opportunities for employers in 2025. While unions are likely to push for higher wages, better benefits, and improved working conditions, employers can still benefit from the flexibility that collective bargaining agreements (CBAs) offer. CBAs can override certain aspects of labor law, allowing employers and unions to agree on conditions that better suit both parties, such as modified work hours or more cost-effective benefits packages. This flexibility can help businesses manage labor costs while still complying with legal requirements.
• Inspections in the workplace are expected to become more stringent by 2025, with a focus on labor law compliance and health and safety standards. Employers should prepare for more frequent inspections, especially in high-risk industries like construction and manufacturing. The government is also likely to leverage digital tools for monitoring, making remote inspections more common with the recent issuance of the Electronic Labor Domicile. To stay ahead of this, employers should invest in regular safety training, ensure compliance with evolving regulations, and maintain transparent reporting systems. Proactive adherence to labor laws will help avoid fines, enhance workplace safety, and promote a culture of compliance, while reducing legal risks.
• Workplace investigations will be even more crucial for employers, both to mitigate labor risks and to anticipate the increasing number of inspections by labor authorities. Brazilian labor laws require fair, transparent, and well-documented investigations, especially regarding matters like harassment and discrimination. Employers must ensure compliance with procedural standards and maintain confidentiality.
• The Equal Pay Law will likely be more strictly enforced, with increased scrutiny on gender pay gaps. Employers will need to ensure compliance by reviewing and adjusting compensation structures to avoid legal risks and reputational damage. While the law allows some flexibility, such as performance-based pay differences, companies may face inspections from the Ministry of Labor, as well as pressure from unions. Businesses should proactively audit their pay practices to mitigate the risk of legal disputes and ensure they meet the emerging expectations for workplace equality.
• Beginning in April 2025, new visa requirements for individuals from Australia, Canada, and the United States will apply in Brazil. Employers will need to ensure compliance with these regulations for their international workforce from these countries. Ensuring the adequacy of internal mobility policies and adherence to Brazilian immigration rules will be crucial to avoid penalties and ensure smooth entry for individuals from these countries.

In 2024, key updates in Brazilian labor law included the beginning of the enforcement of equal pay compliance and the mandatory use of the Electronic Labor Domicile. The STF’s decisions providing for further flexibility on outsourcing and mental health in workplace also drew more attention from labor authorities. Looking to 2025, employers may face challenging union negotiations, more frequent inspections, and greater scrutiny on equal pay compliance. Adapting to these changes will be essential to avoid legal risks and ensure continued smooth operations.