🧑‍⚖️ Labor lawsuits make a comeback in Brazil

Hello! Welcome to Brazil Business. Today, we go over the recent surge in labor lawsuits in Brazil. If you have any questions about this newsletter, or topics you’d like to see covered in future issues, you can reach us at [email protected] 

Brazilians are going back to court to resolve labor issues

Brazilian labor courts received more than 2 million new lawsuits in 2024, a 14% increase from the previous year and the highest number since the country’s sweeping 2017 labor reform. The surge signals a growing legal pushback against changes that were initially designed to curb litigation.

The number of labor lawsuits plummeted after the 2017 reform, largely due to a provision that placed greater financial risk on workers filing claims. Workers who lost their cases were required to cover court costs, a policy that had a reasonably quick effect of reducing litigation.

In 2021, however, the Supreme Court ruled that workers earning less than 40% of the country’s social security ceiling — equivalent to BRL 3,114 (USD 545) per month — could not be forced to pay legal costs if they lost. In late 2024, the Superior Labor Court went further, ruling that even workers earning above that threshold could be exempt if they submitted a sworn statement of financial hardship. 

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