3 Intricacies Of Brazil Vacation Laws Employers May Want To Consider

• Published date: 14 October 2022
• Subject Matter: Employment and HR, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: Ogletree, Deakins, Nash, Smoak & Stewart
• Author: Ms Diana Nehro and Zachary V. Zagger

Understanding the intricacies of local labor laws is critical for any business with operations in multiple countries or looking to establish operations in a new country. This is especially true for laws regulating or mandating vacation time as many countries, such as Brazil, have systems that differ from what employers may be accustomed to in the United States. Failure to rigorously comply with these laws could force employers to pay costly penalties and allow employees to use up large amounts of accrued vacation time.

Here are three intricacies of Brazil's vacation laws that employers operating in the country might want to consider:

1. 30 Days Paid Vacation

Under Brazil labor law, employees are entitled to 30 paid vacation days each year after their first 12 months of work and accrue 30 days each 12 months thereafter. Under Brazil's 2017 labor reform, employees may use the vacation in three periods, but one of those periods must be at least 14 consecutive days in length and the other two must be at least five consecutive days each. The vacation time may not begin on a Friday, Saturday, or Sunday, or within two working days prior to a paid rest day or a federal public holiday.

2. Vacation Bonus

When taking vacation time, employees are entitled to their regular pay in addition to a vacation bonus equal to one-third of the employees' monthly pay. The law requires employers to pay out the vacation bonus two days prior to an employee's planned vacation. This vacation bonus is due to an employee at termination on a pro-rated basis.

3. Vacation Penalty

Vacation time must be taken within one year after it is earned, though employees have the option to sell back up to 10 days to their employers'essentially requiring employers to pay out the cash equivalent of those days to employees. However...