Legal Seminar - Expatriation - 2010

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Legal Seminar - Expatriation - 2010

  1. 1. International Employment Agreement
  2. 2. Talking, here in Brazil, about international employment agreement, and specially to a foreign company seeking opportunities and information... ....is talk about the brazilian law.
  3. 3. Why? Because all employment relations executed in Brazilian soil, shall respect the Brazilian law, and all conflicts must be solved by the brazilian justice. The only exception comes when the foreign law is most favorable to the employee (situation that not, necessarily, triggers the Brazilian rules)
  4. 4. In fact, every time that a foreign company decides to start a new business in Brazil, beside the whole string of concerns (as registering property, paying taxes, enforcing contracts etc.), the company shall observe one large quantity of normative issues and protective principles, regarding the labor rights. (this is very important, otherwise, the company may face a lot of problems).
  5. 5. So, how does it work?
  6. 6. 1st – observe the minimum labor standards vested by the Brazilian Federal Constitution 2nd – observe the rights guarantied in the Consolidation of Labors Laws (wich is composed by 922 articles) 3rd – observe the rights contemplated in the normative acts (depending on the sector of actuation)
  7. 7. 4th – observe the rights in the collective agreement (depending on the professional category, and its Trade Union) 5th – observe the clauses of the individual agreement 6th – (for international contracts) – observe the rights related to the original country and…
  8. 8. do not forget to observe all costs involved in the agreement...
  9. 9. Regarding the Brazilian Federal Constitution, the standard labor rights are the following: Mandatory Fund of Unemployment Benefit (FGTS): 8,5% per month Minimum wage (BRL 510,00 ~ EUR$ 229,00) 13th salary Wage irreducibility 8 hours working time daily, 44 hours weekly Overtime payment (minimum of 50% of the hourly wage)
  10. 10. remunerated weekly rest (preferably on Sundays) annual holidays maternity leave/ paternity leave prior layoff notice (30 days) additional salary (insalubrities/ hazardous/ night schedule ) prohibition of wage discrimination (and nationality discrimination) Participation in profit sharing (specific rules, Law 10.101/2001)
  11. 11. Example of employee in Brazil (minimum charges) Salary: BRL 5,000.00 Annual Holidays: BRL 555.50 13th BRL 416.50 FGTS BRL 425.00 Social Security: BRL 1,730.00 Total: BRL 8,127.00 (minimum labor charges is about 62%, but can overpass 100%)
  12. 12. Concerning the additional wages, is important to know: Night schedule (is from 10pm until 5am; is remunerated with 20%) Insalubrities (harmful health situation; is remunerated with 10%, 20% or 40%, based on the minimum wage, and depending on its level) Hazardous (dangerous and risky situations; is remunerated with 30%)
  13. 13. Another important thing: there are differences between salary, bonus, gratification and benefits: The salary is a payment as consequence of the performed work (all the labor charges fall upon the salary). The salary is the base for the 13th salary, vacations, overtime, FGTS (unemployment guarantee fund), INSS (social security national institute) and many others. Either the payments are fixed or variable (percentage or commissions), they are considered as salary before the law...
  14. 14. Whenever a bonus is paid as consequence of work, it is considered a salary. Only the gratification is not considered as salary if it is not adjusted (in other words, it is the employer’s free will).
  15. 15. The benefits compound the remuneration. However if they are adequately adjusted, they are not made part of the salary before the law. For example: transport, private pension, graduation course, medical assistance, dental assistance…
  16. 16. My final message...
  17. 17. THANKS Marcello Vieira Machado Rodante Founding partner of Rodante & Scharlack Advogados LL.B from the Law School Metropolitanas Unidas Specialization in Brazilian Constitutional System - EDC LL.M in Procedural Civil Law (Litigation) - CEU Attending Specialization in Commercial Arbitration – FGV mr@rsch.com.br May 17th, 2010.

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