Brazil: Employment & Benefits – 2025 Highlights and 2026 Outlook

This past year marked a period of significant regulatory and jurisprudential activity affecting labor and employment practices in Brazil, with developments spanning worker classification, pay transparency, immigration facilitation for technical assignments, enforcement architecture, and protections for minors in the digital economy. Together, these changes underscore a sharpened focus by courts and the Ministry of Labor and Employment on compliance, governance, and risk prevention—particularly in areas prone to misclassification, unequal pay, and psychosocial harm. Looking ahead, 2026 promises further clarity and momentum: decisive rulings by the Federal Supreme Court are poised to reshape employer obligations and workforce strategies across sectors, with rulings expected on the full operationalization of psychosocial risk management obligations, an expanded inspectorate, adjustments to holiday work in commerce, and a national debate over working time limits.

2025: Highlights

1. The Federal Supreme Court recognized general repercussions in Theme 1389, which deals with “jurisdiction and burden of proof in cases discussing the existence of fraud in civil/commercial service contracts; and the legality of hiring a legal entity or self-employed worker for this purpose.” As a result, a nationwide suspension was ordered for cases dealing with the legality of hiring through legal entities until the issue could be definitively decided. This move reinforces the focus of labor authorities and the judiciary on distinguishing between lawful hiring for the provision of services and fraud that seeks to mask an employment relationship.

2. The Ministry of Labor and Employment inspected more than 800 companies with 100 or more employees to check compliance with Law 14,611/2023 (the Equal Pay law), which requires the publication of the Salary Transparency and Remuneration Criteria Report. The inspection shows that the obligation of wage transparency is no longer just a regulatory expectation but has become a concrete focus of action for labor inspectors. For companies, this means that non-compliance can result in fines of up to 3% of payroll, and further administrative penalties.

3. Foreign nationals can now carry out short-term technical activities and technology transfer in Brazil using a regular visitor visa. Until the publication of Decree No. 12,657 in October 2025, this type of activity was only permitted with a temporary work visa. Some important points are that entry must occur under a contract signed with a Brazilian company, and that a temporary work visa is still required for stays longer than 90 days. This change represents an important advance over the previous rules, offering more flexibility for companies carrying out short-term projects, installations, or training in Brazil.

4. The Federal Supreme Court, in ruling on Theme 1232, ruled that a company belonging to an economic group cannot be included as a defendant in labor enforcement proceedings if it did not participate in the trial phase of the proceedings. The decision establishes that the claimant must indicate the jointly liable parties (economic group) in the initial petition, with the redirection of enforcement being allowed only in exceptional circumstances, in cases of business succession or abuse of legal personality, through the mandatory filing of a Motion to Disregard Legal Personality.

5. The Public Labor Prosecution Office in São Paulo obtained a preliminary injunction prohibiting platforms from allowing the production of digital content involving child artists without the proper judicial authorization. This public civil action seeks to curb the exploitation of child artistic labor and the platforms’ failure to protect children’s rights, requesting the inclusion of a ban on child labor in their usage policies, reinforcing that the objective is to ensure that the artistic participation of children occurs within legal limits and with due protection.

2026: Outlook

1. In 2026, the Federal Supreme Court is expected to issue a final ruling on Theme 1389. The decision may establish binding guidelines on whether or not it is possible to hire through a legal entity without recognizing an employment relationship, as well as define clearer criteria on the jurisdiction of the courts (labor or common court) in such cases. Companies should anticipate action plans for different scenarios. It is recommended to map contracts through legal entities, review practices (delegation, subordination, periodicity), and define a transition or regularization strategy, if necessary.

2. Regulatory Norm No. 1 from the Brazilian Ministry of Labor was revised in 2025 to include psychosocial risks as a mandatory part of the statutory Risk Management Program. This requirement represents a deepening of the issues of mental health at work and occupational safety, expanding the responsibility of companies in preventing and mitigating risks such as working under excessive pressure, burnout, harassment, and excessive working hours, among others. By 2026, the requirement of this norm on psychosocial risks is expected to take full effect, with increased enforcement, labor audits, and more comprehensive reporting requirements.

3. The appointment of 855 Labor Inspectors authorized by the federal government aims to rebuild the Brazilian Ministry of Labor’s workforce, and the direct impact for 2026 is the strengthening and expansion of labor inspection capacity in the country, allowing the Ministry of Labor to meet the growing demand for labor inspections in various sectors, monitor working conditions more efficiently, and intensify the measures against irregularities at work, thus ensuring the enforcement of labor regulatory norms.

4. The Ministry of Labor has postponed the entry into force of Ordinance No. 3,665/2023, which regulates work on holidays in the commerce sector, until March 1, 2026. This decision aims to grant a technical deadline for the consolidation of negotiations and maintain social dialogue. The original ordinance, dated November 2023, seeks to reestablish the requirement for a collective agreement between employers and workers for the authorization of such work, in accordance with Law No. 10,101/2000, correcting a distortion from a previous government’s ordinance that allowed unilateral authorization.

5. The “Life Beyond Work” movement against the 6x1 work schedule has become a national movement. Now, the movement is coordinating in the National Congress the advancement of a Constitutional Amendment Bill that aims to abolish the 6x1 schedule and reduce the work week from 44 to 36 hours. The movement advocates for continued mobilization on social media, as well as strengthening the Consolidation of Labor Laws, and estimates that the vote on the Constitutional Amendment Bill could take place in the first half of 2026.

Employers operating in Brazil face a transformed regulatory landscape that is both more exacting and more actively enforced. The emergent themes—heightened scrutiny of service-based contracting models, comprehensive psychosocial risk management, and potential reconfiguration of working time—collectively call for disciplined governance and proactive planning.

Businesses should map and triage exposure, align contracting and HR practices with evolving standards, reinforce internal controls and reporting, and prepare scenario-based action plans for anticipated judicial and regulatory outcomes in 2026. Those that anticipate change and operationalize compliance will be best positioned to mitigate risk, maintain workforce trust, and sustain operational continuity in the year ahead.