Brazil’s 2026 Presidential Election: What Employers and Global Mobility Teams Need to Know

President Luiz Inácio Lula da Silva (PT) was re-elected in Brazil’s presidential runoff on 25 October 2026, defeating Senator Flávio Bolsonaro (PL). His next term begins on 5 January 2027. For employers, the focus now turns to how campaign commitments may translate into government policy. Important changes to working hours and paternity leave have already been enacted, making it essential to distinguish political commitments from binding compliance deadlines. Re-election does not itself bring campaign proposals into law; measures requiring legislative change will still need approval by Congress. 

Our Brazilian member firm, Gaia Silva Gaede Advogados (GSGA), examines the implications for employers, international HR teams and businesses transferring employees and executives into or out of Brazil. 

The key priorities for employers are to: 

• Prepare now for the 42-hour week and two paid weekly rest days, which become mandatory in mid-December 2026. 

• Separate enacted changes from campaign commitments when preparing workforce plans and budgets. 

• Review working-time arrangements, parental-leave policies and executive employment terms. 

• Treat proposed hiring incentives as potential opportunities, not guaranteed payroll savings. 

Assess international assignments alongside domestic operations, rather than assuming overseas arrangements are unaffected. 

Working hours: A new compliance timetable 

Constitutional Amendment No. 141, promulgated and published on October 16, 2026, provides for a progressive reduction in the standard maximum workweek from 44 to 40 hours, without any reduction in pay, including collectively agreed wage floors. 

As a constitutional rule, it can be changed only by another constitutional amendment, which requires three-fifths majorities in both houses of Congress. During the campaign, Flávio Bolsonaro endorsed an alternative proposal (PEC 12/2026) for optional hourly-based employment in which individual agreements would prevail over collective ones. His election defeat does not itself determine the fate of legislative proposals; employers should continue to plan around the enacted amendment unless the law changes. 

The general transition requires 42 hours per week and two paid weekly rest days two months after publication, followed by 40 hours twelve months after that first stage—placing the principal implementation stages in mid-December 2026 and mid-December 2027. One of the two rest days should preferably fall on a Sunday, but the amendment does not impose a universal Monday-to-Friday schedule. 

Collective agreements may still provide for hour-compensation schemes and, exceptionally, for two rest days per week on average over the calendar month, with at least one in every week; during the 42-hour phase, they may also extend daily hours. However, existing collective clauses on working time and rest that are incompatible with the amendment will lapse two months after publication. 

Employees already working 40 hours or less keep their hours but also gain the second rest day. 

For international employers, another provision deserves attention: already in force, private-sector employees with a higher-education degree and monthly compensation of at least 2.5 times Brazil’s general social-security benefit ceiling (about R$ 21,190 in 2026, adjusted annually) are generally exempted from working-time and time-recording rules. The two weekly rest days remain mandatory for this group, and collective agreements or employer-granted terms may preserve additional protections. This test should not be confused with the CLT’s existing two-times-the-ceiling threshold for individually negotiating certain contract terms. 

Employers should therefore review shift coverage (including 12x36 and other compensatory schedules), overtime calculations, payroll settings, collective agreements and executive classifications now. The exemption should not be applied simply because an employee has an executive title; both requirements—degree and pay level—must be met and documented.

Payroll costs: Proposed relief is not yet an entitlement 

During the campaign, Flávio Bolsonaro proposed gradually reducing formal employment costs without removing employee rights. His proposals included a lower-cost employment contract for first-time jobseekers aged 18–24 and a “more attractive” contract model for people aged 50 or older who have been unemployed for at least twelve months. Following his defeat, these proposals should not be presented as the incoming administration’s policy or included as expected payroll savings. 

Lula’s program emphasized continued real increases in the minimum wage and broader social-security protection, but did not present a detailed, across-the-board payroll-tax reduction. Employers should monitor the measures adopted during his next term before adjusting payroll budgets. 

Existing legislation remains the starting point for budgeting. For eligible businesses using sectoral payroll relief, Law No. 14,973/2024 already provides for the phased restoration of payroll-based employer social-security contributions, with transitional arrangements continuing through 2027 and the full 20% contribution applying from 2028. Campaign commitments do not themselves replace that schedule. 

Potential incentives should be modeled separately from committed savings, including when calculating the total cost of an international assignment. 

Collective bargaining and contracting: Priorities for the next term 

Lula’s campaign proposals included stronger collective bargaining, renewed union assistance with termination formalities (mandatory for longer-serving employees until the 2017 labor reform) and increased inspections targeting fraudulent pejotização - the use of personal service companies to conceal employment relationships. Following his re-election, employers should monitor how these commitments develop into specific legislative or enforcement measures. 

These priorities matter for workforce restructuring, outsourcing and executive contracting. However, greater contractual flexibility does not mean unrestricted freedom to waive employment rights. Brazilian law already allows collective agreements to override certain statutory provisions, subject to constitutional limits; individual agreements do not enjoy equivalent, unrestricted scope, except for certain matters that graduate employees earning at least twice the ceiling may negotiate individually. 

Businesses should therefore review contractor and executive engagements against their actual operating arrangements, applicable legislation and case law - not assumptions about the direction of the next presidential term. A pending Federal Supreme Court ruling on the lawfulness of engaging individuals as contractors or through their own companies (Theme 1,389) may reshape this area independently of the election result. 

Social protection for platform workers also featured in Lula’s campaign programme. Businesses using platform-based labour should monitor any resulting regulatory proposals separately from conventional employment reforms.

Paternity leave: Changes already scheduled for 2027 

Law No. 15,371/2026 extends paid paternity leave from the current five days to ten days from January 1, 2027, fifteen days from 2028 and twenty days from 2029, with the final increase subject to a statutory fiscal condition (if it is not met, the increase is deferred). 

The law also establishes a social-security-funded paternity benefit and protection against dismissal without cause from the beginning of leave until one month after it ends. Employers generally pay the benefit and obtain reimbursement under the applicable rules. Employees must give 30 days’ notice of the expected leave; a dismissal after that notice that prevents the leave triggers double pay for the protected period. 

HR teams should update leave policies, payroll procedures, staffing arrangements and termination controls. Employers participating in the “Empresa Cidadã” extended-leave program must also consider its additional fifteen days (up to 35 days in total once the 20-day stage applies), subject to the program’s conditions. 

For multinational groups, the task is to reconcile Brazilian entitlements with global parental-leave policies and any more favorable contractual or collectively negotiated benefits, not simply replace the existing policy with the new statutory minimum.

Pay equity and childcare: Distinguish enforcement priorities from existing duties 

Lula’s campaign program committed to strengthening policies on equal pay for women and men. Employers should monitor any additional measures introduced during his next term. Proposals made by Flávio Bolsonaro on childcare vouchers were campaign commitments by the unsuccessful candidate and should not be treated as forthcoming government policy. Existing employer childcare obligations under labour law continue to apply. 

Equal-pay compliance remains an existing obligation. Law No. 14,611/2023 already imposes equal-pay obligations, requires semiannual pay-transparency reporting by private employers with at least 100 employees, and provides for corrective action plans where relevant inequalities are identified. In May 2026, the Federal Supreme Court unanimously upheld the law’s constitutionality. 

Employers should maintain clear documentation of compensation criteria, promotion decisions and legitimate reasons for pay differences. International assignment allowances and differences between local and expatriate compensation should form part of that review.

International assignments: Domestic changes can have cross-border consequences 

Lula’s published campaign programme reviewed for this article did not set out a detailed overhaul of employment-based immigration or international assignment rules. The principal immediate concern is therefore how domestic employment changes affect assignment costs, working time, benefits and contractual structures. 

For assignments into Brazil, foreign nationality does not exclude a worker from applicable Brazilian employment protections. Immigration authorization and employment-law compliance are separate questions; obtaining permission to work does not resolve the individual’s employment status or contractual entitlements. 

Companies should distinguish local employment from corporate-office appointments and review executive exemptions individually. Payroll divided between countries, assignment allowances, net-pay guarantees and social-security coverage should be assessed together. They should also reflect income-tax changes in force since January 2026 (Law No. 15,270/2025), including a minimum tax on high incomes and withholding on large dividend distributions. 

For assignments out of Brazil, Law No. 7,064/1982 is particularly important. For transfers within its scope, more favorable Brazilian employment protections may remain applicable, comparing the relevant rules as a whole for each subject against host-country law. Brazilian social-security and FGTS (severance fund) rules also generally continue to apply, subject to any applicable social-security agreement. Consequently, changes to Brazilian working-time or leave rights may require a fresh assessment of outbound assignments, not only domestic employment contracts. 

Now is the time to review your workforce plans for December 2026 and beyond 

Employers should prepare on two tracks: implement enacted changes according to their statutory deadlines, while monitoring which campaign commitments become concrete government measures. 

A coordinated review should bring together employment counsel, HR, payroll, tax and global mobility teams. Particular attention should be given to working-time arrangements, collective agreements, parental leave, contractor classification and international assignment documentation. 

With the election decided, workforce planning should remain anchored in the law actually in force and the implementation dates already established, while allowing for further policy developments during Lula’s next term. Political expectations should not substitute for a documented compliance assessment. 

For further information or to discuss the issues raised, please contact Enrico Soffiatti (enrico.soffiatti@gsga.com.br), Partner at Gaia Silva Gaede Advogados (GSGA), through the Curitiba office at +55 (41) 3304-8800.