What are the Differences in the Hiring of Employees between Brazil and the USA – Connect HR Strategy. Atlanta

What are the Differences in the Hiring of Employees between Brazil and the USA

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One of the factors that tends to hold back foreign investment in Brazil is the stringent labor laws that are largely in favor of the employee, when compared to many other countries. This is not so much true in the USA, where many states have so-called “Employment at Will” provisions in the laws. This means that in most cases, the employer does not have an obligation to keep an employee in the job, it is easier to dismiss them, and most benefits are not mandated by the government, rather, they are offered by the employer as a means to attract the best employees to their companies in the currently very competitive job market.

So, once an employee is hired, the employer in the United States has much more flexibility than one in Brazil. With easier labor laws, that carries over to the recruiting and selection process as well, right?

NO!

As of the beginning of June 2019, while the level of unemployment in Brazil hovers around 12.5%, the United States is enjoying its lowest level of unemployment in over 50 years, with rates well below 4% nationally, and in some sectors, such as IT, the unemployment rate is actually negative. There are more jobs available than there are people to fill them.

So, before we discuss how to go about recruiting and selection, let’s take a look at the labor laws and requirements in both countries. Hers are some important differences that should be taken into account when preparing to hire in the USA:

Legal Aspects

A. Brazil

There are labor rights in the country determined by the Federal Constitution. Among the main ones are:

  • Unemployment insurance in the event of involuntary unemployment;
  • Guarantee Fund based on time of service;
  • Minimum wage, fixed by law;
  • Extra month salary based at full pay;
  • Participation in the annual profits of the company;
  • Additional salary based on each dependent family member;
  • Paid weekly time off;
  • 20 days paid maternity leave for women;
  • Termination notice proportional to the time of service, thirty days minimum;
  • Additional pay for painful, unhealthy or dangerous activities;
  • Free assistance to children and dependents up to 5 years of age;v
  • Worker’s Compensation insurance;
B. USA

Each U.S. state has its own labor laws and specific departments, in addition to federal regulations Here are two entities that are the sources of many federal regulations. The differences by state are numerous and not covered here:

  • The US Department of Labor regulates the entire federal labor structure;
  • The US Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws related to the aspects of discrimination against the applicant or employee such as: race, color, religion, gender, age, sexual orientation or disability.

Documentation

A. Brazil

Determined by Employment law - the contract may be with a term agreed to by the parties or indeterminate and registered in the Labor and Social Welfare System (CTPS).

B. USA

Generally, there are two types of documents involved when a company or organization hires someone. Most common, especially for non-executive jobs is the "Offer Letter". It is written by the company and describes the pay, the work schedule, the general responsibilities of the employee, and the benefits. The other type is the "Employment Contract", usually associated with higher level or executive jobs. Although the Offer Letter is also a legal document, often the Employment Contract is prepared by a lawyer, and describes remedies in case either party violates the terms of the contract. It is also usually used to explain more complicated employment arrangements.

Anyone who performs work in the United States also must register with the Social Security Administration. Because almost everyone works at some point in their lives, parents usually obtain a Social Security card when their children are born or shortly thereafter. This is the only form of national ID in the USA, and is usually kept confidential, because if it is stolen, much damage can be done by criminals to the financial situation of the person.

Salaries and benefits

A. Brazil

In addition to the monthly minimum wage established by law for 44 weekly hours/220 hours monthly worked, there is:

  • Paid Maternity leave;
  • Paid Sick leave;
  • Disability retirement;
  • Retirement based on age;
  • Special retirement;
  • Retirement by time of service;
  • Accident insurance;
  • Additional salary based on number of dependents;
  • Pension benefit for surviving relatives;
  • Aid-imprisonment;
  • Overtime – 50% additional for workweek hours and 100% on weekends, days off and holidays.
B. USA
  • The minimum wage varies by state, provided it is at least as much as the amount established by the Federal government of $7.25 per hour worked;
  • There is no limit of hours worked. Workers paid by the hour must be paid for all additional hours above 40 hours per week, most salaried employees do not have to be paid additional. The amount of the overtime pay is at the discretion of each employer, but must be at least equivalent to the normal hourly rate. It is common for hours 41-60 to receive a 50% bonus, and about 60 hours, and holidays, 100% or 150% bonus.
According to the US Department of Labor, there are some exceptions that apply to administrative positions, employees who work in the area of sales, education, and IT.
  • There are a few other benefits for the worker. Additionally, there are sometimes benefits offered for the company to remain competitive with other employers when attracting and keeping employees. There may be payroll deductions for either type. Some of the mandated ones are:
    • WORKER’S COMPENSATION is a labor insurance system, a mandatory cost paid by the employer which protects the employee in the event of an accident at work;
    • SOCIAL SECURITY – A form of retirement pay, similar to Prevedência in Brazil, including support of retired workers, their survivors, and occupational disability insurance;
    • MEDICARE – Medical Insurance.

    Considerations when recruiting - Brazil/USA

    • Job description;
    • Definition of salary and benefits;
    • Definition of the profile required by the company;
    • Passive and active hiring strategy, websites, Hunting and consultants.

    Still want to navigate these strange waters alone? Connect HR not only has much experience supporting great companies in the United States through HR Administration, but we have been very successful in developing and implementing strategies to both attract and retain the best and brightest employees for foreign-owned companies and organizations doing business in the United States, so that the leadership team can focus on running their business and serving their clients.

    Let’s get started today! How can we help you?