Mayer Brown

This year has brought several significant updates to Brazilian labour 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 of Changes in Brazilian Labour Law Equal Pay Equal pay has become a focal point in Brazilian labour 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 Labour, 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.   Electronic Procedures This year, the Electronic Labour Domicile became the mandatory platform for receiving official labour-related communications regarding the Ministry of Labour's administrative procedures. This change eliminated the use of traditional means for receiving infraction notices and notifications by centralizing and streamlining the delivery of labour-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. In 2024, the main change introduced by the Electronic Judicial Domicile, regulated by Resolution No. 455/2022 and Ordinance No. 29/2023 from the CNJ, is the centralization of all judicial communications from Brazilian courts into a single platform. This enables more efficient receipt and tracking of summonses and notifications. The key development is Ordinance No. 46/2024, which establishes a mandatory registration deadline for private legal entities by May 30, 2024. If they miss the deadline, these companies will be automatically registered by the CNJ based on data from the Federal Revenue Service. For individuals, registration remains optional, while microenterprises and small businesses must register only if they do not have an electronic address in the Redesim system. This measure aims to regulate Article 246 of the Code of Civil Procedure, amended by Law No. 14,195/2021, and imposes penalties, such as a fine of up to 5% of the claim value, if the electronic summons is not confirmed within three business days. For other judicial communications, if not confirmed within ten calendar days, they will be automatically considered completed at the end of this period. The platform also offers email alerts to help track deadlines.   Legal Regulation and Case Law of Outsourcing in Brazil 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 Labour Code. Outsourcing arrangements that are deemed as a fraud to the labour legislation, requiring individual to establish and provide services under legal entities could be annulled by the courts, leading to legal liabilities and potential fines.   Regulation on Platform Work Regulation on 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 Mental health in the workplace has been a growing focus for employers. Under the Brazilian Labour 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 labour claims and inspections from labour authorities related to mental health issues.     2025: Outlook on Developments in Brazilian LaboUr Law Union Negotiations 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 labour 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 labour costs while still complying with legal requirements.   Inspections in the workplace Inspections in the workplace are expected to become more stringent by 2025, with a focus on labour 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 Labour 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 labour laws will help avoid fines, enhance workplace safety, and promote a culture of compliance, while reducing legal risks.   Workplace investigations Workplace investigations will be even more crucial for employers, both to mitigate labour risks and to anticipate the increasing number of inspections by labour authorities. Brazilian labour 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.   Equal Pay 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 Labour, 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.   Workday Rules In 2025, a federal constitutional amendment proposal (PEC) may be presented in the Chamber of Deputies with the goal of redefining the limits of working hours in Brazil. The PEC raises an important debate on modernizing labour relations and its effects on both worker health and safety and the country's economy. Currently, the Federal Constitution sets a maximum workday of eight hours per day and 44 hours per week, with the possibility of flexibility through collective bargaining. The PEC proposes that the workday not exceed eight hours, but only for four days a week, with a maximum weekly workload of 36 hours. The proposal aims to implement a 4×3 work schedule, meaning four days of work followed by three days of rest. The justification for the PEC's creation is the need to offer greater protection to workers, focusing on their health, quality of life, productivity, and well-being. Long work hours can lead to physical and psychological impacts, such as fatigue, stress, and occupational illnesses. Therefore, the proposal seeks to create balanced working conditions.   Paternity Leave and Paternity Salary: Proposed Changes in Brazil The Human Rights and Participatory Legislation Commission (CDH) approved the proposal (PL 3.773/2023) that increases the duration of paternity leave and introduces a paternity salary. Currently, paternity leave lasts five days, but the proposal suggests a gradual extension, potentially reaching up to 75 days. In addition, companies that participate in the Citizen Company Program may extend the leave by up to 15 additional days. The proposal also establishes a paternity salary, which would be equal to the employee's full remuneration. This salary would be paid by the employer and later reimbursed by Social Security. The proposal must still go through several committees, including the Constitution and Justice Committee (CCJ), before being sent to the Chamber of Deputies. According to the text, paternity leave can be split into two periods: the first taken immediately after the birth or adoption, and the second within 180 days of the event. Additionally, in cases of premature birth or parental death, the leave will be extended or adjusted accordingly. The final regulation of paternity leave is expected to be concluded by 2025, as set by a deadline established by the Federal Supreme Court (STF). If not regulated by then, the STF may define the conditions for paternity leave.   FINAL CONSIDERATIONS In 2024, key updates in Brazilian labour law included the beginning of the enforcement of equal pay compliance and the mandatory use of the Electronic Labour Domicile. The introduction of the Electronic Judicial Domicile also became mandatory, streamlining communication between parties and the judiciary in labour-related matters. The STF’s decisions providing for further flexibility on outsourcing and mental health in the workplace also drew more attention from labour authorities. Looking to 2025, employers may face challenging union negotiations, more frequent inspections, and greater scrutiny on equal pay compliance. Furthermore, a proposed constitutional amendment (PEC) to redefine working hours in Brazil is expected to be a significant issue, with a potential shift toward a 4×3 workweek, which could impact labour relations and operational planning. Adapting to these changes will be essential to avoid legal risks and ensure continued smooth operations.   Authors:   Aline Fidelis [email protected]   Daniel Landim [email protected]   Thiago Garcia [email protected]   Fernanda Pina [email protected]

Overview of the Brazilian Labor Law provisions on DEI matters