Labor law regulations regarding severance pay and deductions in Brazil

Under Brazilian labor law (CLT), specific rules govern deductions during the termination of employment contracts. One common point of contention involves the notice period (aviso-prévio). When an employee resigns and fails to fulfill the notice period, the employer is legally permitted to deduct the equivalent salary from the final severance pay, unless the employer explicitly waives the requirement or agrees to an immediate departure.

Disputes often arise due to a lack of formal documentation regarding whether the employer authorized an immediate exit. To avoid legal issues, companies must verify the employee's specific request and the agreed-upon conditions for departure before applying such deductions.

Other potential financial pitfalls for workers include improper deductions for equipment damage. According to the Labor Reform (Law 13.467/2017), deductions for damages, such as broken mobile phones, are only permissible if there is proof of intent (dolo) or if such a possibility was explicitly stipulated in the employment contract. Generally, legal deductions are limited to advances, payroll loans, and social security contributions.