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Global companies don’t have to hire Brazilian talent to be a success, but it’s proving to be one of the quickest routes to quality workforce expansion in the digital era.
With one of Latin America’s most vibrant and diverse pools of working talent, it’s a small wonder HR heads at global companies are putting the task of hiring independent contractors in Brazil at the top of their list of priorities in 2023.
Flexible, talented, and free from many of the contractual issues that come with recruiting fixed-term employees in emerging markets, independent contractors provide a big growth opportunity for ambitious companies looking to make the most of the borderless digital era.
But despite their obvious benefits, senior recruiters at top international firms have found hiring independent contractors in Brazil to be something of a minefield. If you’re one of them, you may have tripped over certain hazardous areas, including:
Brazil’s complicated regulatory system differs from the ones you’re probably used to, making it difficult for foreign companies to complete the recruitment process. One of the biggest dangers is misclassification, where businesses can incur fines of up to BRL 400,000 (around USD 77,000) for failing to register workers correctly.
In this article, we’re going to cover how to avoid misclassifying workers, the benefits of hiring independent contractors in Brazil, and how a new embedded digital solution is making the teething difficulties of onboarding Latin American recruits a thing of the past.
The first step toward side-stepping regulatory issues is to pinpoint how exactly an independent contractor in Brazil differs from a regular employee. Should you hire the services of a Brazilian employment expert, or an Employer of Record (EOR), they’ll point out several key legal differences.
The first step is following the definitions set out in the Brazilian Labor Code (CLT), which refers to an employee as someone who ‘renders services on a permanent basis’, subject to an employment agreement.
A contractor, on the other hand, simply enters into a contract as an independent person who carries out the work on a non-permanent basis.
In terms of payment, Brazilian laws dictate that contracted workers receive certain salary privileges that contractors don’t. They must get at least 30 days of paid vacation per year, plus a vacation bonus equal to a third of their monthly pay. A regular employee also gets paid for overtime, receives a 13th-month salary, and even a transportation voucher to go toward commuting expenses.
As an employer, it would also be your responsibility to deduct social security contributions from an employee’s salary payments, whereas contractors must do it themselves as self-employed individuals.
Notice periods and severance payments also work differently between the two worker types. Contractors get as little as four days’ notice depending on their contractor agreement, although this can extend to 30 days. Employees get a minimum of 30 days, plus three work days for every year of service.
They also get O Fundo de Garantia do Tempo de Serviço (FGTS)-protected severance pay, which includes unused vacation wages and a vested fraction of their 13th-month salary.
Other factors, such as the level of subordination when carrying out work and the worker’s obligation to present reports and meet targets, are also taken into account by Brazilian Labor courts when distinguishing between the two.
Finding quality independent contractors in Brazil doesn’t have to be tough. Book a call with Remoti’s team today to see how our multi-function global hiring and training platform can add talent to your workforce quickly and efficiently.
As you can see from the previous section, the employee benefits enjoyed by contract workers may make independent contractors a much more attractive option for international hirers.
In addition to having fewer contractual entitlements than their fixed-term colleagues, the length of contractor agreements also tends to be shorter than employment contracts. Their project-based work is shorter by nature and very rarely lasts more than a few months, let alone the two-year limit of a fixed full-time agreement, or an indefinite contract.
Independent contractors in Brazil also charge a much lower salary than their counterparts in the United States for the same (or more) working hours. Glassdoor has the average annual remuneration for a Brazilian software developer (circa $60,000 per year) to be around half that of a US developer (circa $120,000), without the sky-high health insurance that tends to come built into North American contracts.
Yet, despite these clear advantages, the legal and financial obstacles of building a team of independent contractors in Brazil may seem like a daunting web of red tape and trip wires waiting to drain your business of cash.
But rather than become entangled in the hassle of hiring third-party financial advisors and legal experts who may not have your best interests at heart, many HR leaders like you are opting for an all-in-one alternative for the new digital era.
When it comes to building a remote team of independent contractors, you may feel that time is against you.
Not only must you source the best possible talent out there, but you also have to navigate tricky legislation and compliance matters that are particular to each country.
Getting bogged down in paperwork and wrapped in red tape is not conducive to business growth.
Seeing a gap in the market for a customer-focused solution to this problem, we created Remoti to lighten this load and cut through the tape for you.
Whereas certain EOR services seem to have lost their human touch, we provide you with a personal account manager who’ll help you attract and retain the best talent in Brazil’s vast contractor market. Via the all-in-one remoti app, you’ll be able to liaise with our team, and manage your list of recruits.
As our COO Juan Felipe Velasco sums it up, we put “ease, transparency, know-how, and personalization” at the heart of what we do.
Here’s how we do it.
Our CEO Pablo Miller’s message to contractors in Brazil is simple: “We find you, we hire you, we grow you”.
This ethos underlines what goes into Remoti’s unique approach to sourcing and molding the perfect recruits for a growing workforce. Our Talent Scout feature uses a neural network of local agents who scouts Brazil’s fintech, Web 3.0, and other cutting-edge sectors to find you a list of suitable candidates.
Our in-house EdTech program (featuring language, coding, and management education courses) then offers the opportunity to skill them up into oven-ready professionals that can get off to the fastest start possible once on board.
“We find you, we hire you, we grow you” – Pablo Miller, CEO of Remoti
You’ll be kept up-to-speed through constant and personalized communication, including chat and notifications, giving you full control over who you bring in.
Finding new talent might be tough, but staying in line with legal requirements is one of the biggest challenges when dealing with employment in Brazil.
Often global companies set up a legal entity there, but this is a costly and time-consuming uphill battle which can still suffer from lengthy bureaucratic holdups and tax issues.
Remoti’s embedded platform avoids this hassle by plugging you into local legal services that work with Brazilian jurisdictions every day. They’ll help you meet full compliance with local laws by drawing up watertight agreements that protect both you and your contractors.
Once your new recruits are on board, you’ll be able to link your monthly payroll to Remoti’s app. Think of it as a mobile HR information system (HRIS).
You can access and manage your hired candidates, handle their monthly payments, and view tax administration or any other local legislative or regulatory matters.
Cross-border payments will cease to be an issue as we deal solely in US dollars. You deposit USD into your account, which will be the same USD your contractors receive. No conversion costs, no exchange rate fluctuations, no hassle.
As our COO puts it, we aim to “relieve the administrative workload of the entire hiring process” and help you build a team of contractors that will drive your company forward.
Many EOR or PEO companies focus on outsourcing admin, tax, and payroll services, but this only goes so far.
Remoti aims to provide a consulting service that guides you through each step of the employment process. Our team of specialists will help you with everything, from finding and hiring new recruits to managing your relationship with them throughout the length of the contract.
To sum up, you’ll get an all-in-one package dedicated to expanding your workforce quickly and efficiently.
Why hire an internal recruitment team when you can do everything via Remoti for a fraction of the cost?
Ready to add the finest independent contractors in Brazil to your team? Book a call today with one of our HR experts who’ll show you how you can plug Remoti into your recruitment team and spark your business’s growth.
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