Labor fines: understand the main penalties and how to prevent them

Labor routines and procedures must be implemented to meet all deadlines, ensuring compliance with legal requirements

By Luzinete Rosário

Conformity with labor regulations in Brazil is crucial for ensuring the good standing of your business environment and avoiding severe penalties associated with eventual breaches.

By complying with the legal requirements, companies can minimize the risk of running into problems that could eventually jeopardize operations, thereby avoiding financial risks, operational losses, and reputational damage.

As of April 2024, the most common issues discussed in Brazil's Regional Labor Courts involved overtime disputes and the imposition of fines, such as the 40% Employees’ Severance Indemnity Fund (FGTS) deposits and the late payment of dismissal compensations.

In addition to payroll liabilities, everyday sanctions can also be quite burdensome for employers. In 2024, major adjustments were made to the rules governing the penalties for a range of infractions. Here are some important points to note about these penalties.

 

2024 eSocial fines

The eSocial platform is now a routine part of business operations, yet it still demands constant attention. In addition to regular communications, companies must use the system to report various events that do not have fixed dates, such as employee hiring, pay raises, exposure to harmful chemicals, contract terminations, and other non-periodic events.

Failure to comply with these reporting obligations can result in significant fines and labor liabilities.

In 2024, employers who fail to supply the required information accurately and within the specified deadlines will face a minimum fine of BRL 440.07. This penalty can increase for non-compliance with specific requirements, reaching up to BRL 44,007.30. Additionally, repeat offenses, obstruction of on-site inspections, or contempt of authority can result in fines being doubled.

 

Adjusted penalties for labor infractions

Beyond eSocial requirements, other labor infractions can also lead to penalties. Here are a few examples:

 

Description	Fine
Employee registration (small-sized companies notwithstanding)	BRL 3,101.73 per unregistered employee, doubled for each repeated offense
Vacation	BRL 176.03 per irregular worker, doubled in the event of repeated offenses, obstruction of justice, resistance to inspection, or fraud
Work performed by minors (children, adolescents, and apprentices)	BRL 416.18 per irregular minor, up to a maximum of BRL 2,080.90. In the event of a repeated offense, the total may be doubled .
Individual employment contract	BRL 416.18 doubled for each repeated offense
Late payment of wages	BRL 176.03 per aggrieved employee
Failure to pay severance pay within the legal deadline	BRL 176.03 per aggrieved employee
Thirteenth salary (Christmas Bonus) discrepancies	BRL 176.03 per aggrieved employee, doubled for each repeated offense
Workplace discrimination	10 times the highest salary paid by the employer
Employees’ Severance Indemnity Fund – FGTS:  Lack of deposit for periods after the implementation of the FGTS Digital system Failure to include part of the remuneration for periods after the implementation of the FGTS Digital system Failure to make a deposit for a debt indicated in a notification for periods after the implementation of the FGTS Digital system	30%: levied on the total FGTS debt, doubled for repeat offenses, fraud, simulation, deceit, resistance, obstruction of justice, or contempt for authority.

 

 

Check out the 2024 table of eSocial fines and general labor infractions here (in Portuguese).

 

Preventing labor penalties

Implementing best practices is essential for companies to avoid fines and labor infractions. The departments in charge must ensure that the routines and processes put in place meet all legal deadlines and comply with the vast and complex legislation. Check out some recommendations below: 

 

Implementing a PD management system

Using an employee information management system that aligns with labor regulations and integrates with payroll is essential.

Benefits:

• Compliance: Ensures that information required by eSocial is submitted accurately and on time.
• Centralization: Streamlines the centralized management of all payroll information.
• Automation: Reduces human error in data entry and updates.

 

Deadline management

Establishing a tight deadline management policy is another critical point for ensuring compliance with eSocial requirements and labor obligations. This includes managing processes pertaining to employee hiring, dismissals, severance pay etc.

Benefits:

• Good standing: Prevents fines for late submissions and reduces payroll liabilities.
• Organization: Ensures the company remains well-organized and ahead of schedule with all legal obligations.
• Prevention: Helps identify and correct potential delays before they become critical.
• Cut-off dates: For non-periodic events, such as employee hiring, vacation requests and dismissals, it ensures that submissions are made within the legal deadlines.

 

Specialized labor consultancy

Relying on labor consulting services for ongoing guidance and support enhances business security for companies. This approach helps prevent fines and penalties, potentially leading to significant cost savings.

Benefits:

Expertise: Specialized guidance for navigating complex compliance issues. 

Updates: Keeps the company informed about frequent legislative and regulatory changes.

Support: Offers assistance during labor audits and inspections, ensuring prompt and accurate responses to eventual questions.

Security: Reduces the risk of penalties arising from misstatements or omissions. 

 

Specialized support

DPC has a specialized team in labor and social security consulting, dedicated to helping companies safely navigate Brazil's complex legislative landscape.

Our experts provide ongoing guidance and personalized support, ensuring compliance and minimizing the risk of fines. Reach out to us today at: dpc@dpc.com.br.