Find out about the main types of employment contract and answer your questions

Types of employment contract are fundamental to structuring labor relations in a clear and legal way.

In this article, we will explain in detail the different types of employment contract that exist, their characteristics, advantages and disadvantages, and how each type affects the rights and duties of employers and employees.

We will also discuss practical aspects, answering some important questions, among them:

• How to change the type of employment contract in e-Social?
• Can the company change the type of employment contract?
• What is DET?
• What is the CPRB?

To find out more and check out what our team of experts has put together for you, stay with us and follow this content to the end.

The importance of choosing the right type of employment contract

The types of employment contract are the basis for formalizing employment relationships and the provision of services.

Each type of contract has specific rules defined by the Consolidation of Labor Laws (CLT) and complementary legislation.

Choosing the right model is crucial to avoiding conflicts, ensuring labor rights and guaranteeing the smooth running of the company's activities.

What is an employment contract?

One employment contract is a formal agreement between the company and the employee that establishes the conditions of service.

It defines rights, obligations, working hours, salary and benefits, as well as detailing the relationship of subordination, personality, continuity and onerousness.

For the contract to be valid, the legal requirements must be met, which guarantee the protection of the worker and the legal security of the relationship.

These requirements include the existence of an employment relationship, which generates the obligation to comply with labor regulations, such as vacations, 13th salary, FGTS and other rights.

Why are the types of employment contract important?

Understanding the types of employment contract is essential for HR professionals and managers.

This choice has a direct impact on personnel management, the operating costs and the company's tax strategy.

In addition, choosing the best type of employment contract can avoid the risk of labor liabilities and future legal issues.

It is important to know, for example, that the company cannot change the type of employment contract unilaterally, i.e. without the employee's agreement.

What types of employment contracts are there?

There are various types of employment contract, each of which is suitable for specific situations. The main types of employment contract that exist include:

1. Fixed-term contract: It establishes a fixed period for the provision of services, with a predefined start and end date.
   This contract is useful for meeting seasonal demands or specific projects. It must comply with the legal duration limit, which cannot exceed two years, and can only be extended once.
2. Contract for an indefinite period: This is the most common model and is considered the standard under labor legislation. In this type of contract, there is no end date, which guarantees greater stability for the employee.
   Full employment rights are guaranteed, including vacations, 13th salary and FGTS.
3. Casual employment contract: Used for services that do not require continuity or regularity. This contract does not create an employment relationship and is common for one-off contracts.
   Because it is not continuous, employment rights are limited and there is no obligation to provide benefits such as notice or unemployment insurance.
4. Internship contract: Designed for students, it allows them to complement their theoretical training with practical experience.
   Although it is a special contract, it does not constitute an employment relationship, and interns are not entitled to severance pay, 13th salary or FGTS. It is governed by Law No. 11.788, which establishes the rules for internships.
5. Trial contract: This contract is a type of fixed-term contract designed to assess the worker's adaptation to the company's environment.
   The probationary period is generally limited to 90 days and, at the end, the contract can be converted into an indefinite one.
   During this period, the employee has access to proportional rights, but not all the benefits of an indefinite contract.
6. Teleworking contract: Regulated by the CLT and the labor reform, it allows services to be provided remotely. It can be signed for either a fixed or indefinite period of time.
   This contract requires specific working hours controls and clear communication between the parties, but offers greater flexibility and reduced infrastructure costs.
7. Intermittent contract: Introduced by the Labor Reform, it makes it possible to provide services on a non-continuous basis. Workers are called in to work according to demand and are only paid for the time actually worked.
   Despite guaranteeing rights such as vacation and 13th salary, irregular working hours can pose challenges for personal financial management.
8. Self-employment contract: Although not technically an employment contract, freelance service contracts are widely used.
   In this model, the professional issues payment receipts (RPA) and has no direct subordination, which differentiates this modality from contracts governed by the CLT. In addition, all tax obligations, such as INSS and IRRF, must be paid independently.

Employment relationship and labor rights

Not all types of employment contract generate an employment relationship. In order for an employment relationship to be established, the work must be performed with subordination, personality, continuity and onerousness.

• Contract of indefinite duration e fixed-term employment contract: generate an employment relationship.
• Traineeship contract e self-employment contract: They do not generate an employment relationship, which means they do not have many labor rights.

These differences are essential for HR professionals and managers to choose the modality that best suits the hiring profile and the company's objectives.

How to change the type of employment contract in e-Social

It is very important to know that the company cannot change the type of employment contractThe employee's consent is required for changes of this nature.

When necessary, the change must be made with the consent of the parties and without causing damage to the employee, as provided for in the Art. 468 of the CLT.

With the agreement of the parties, a contractual amendment needs to be signed and the change in the type of employment contract reported to e-Social. To make the change in question, the support of an accounting firm is essential.

What is the best type of employment contract?

Discussing which type of employment contract is bestHowever, the context and needs of the company and the worker must be taken into account.

For long-term hires, an open-ended contract is often the best option, as it guarantees all the employee's labor rights and stability.

In turn, for temporary demands or specific projects, fixed-term contracts or experience may be more appropriate.

In addition, for roles that require flexibility or remote working, the teleworking contract has proven to be efficient, allowing it to adapt to the new demands of the digital market.

Tax aspects: DET, CPRB and direct and indirect taxes

The types of employment contract also have an impact on how the company manages its taxes.

In contracts with an employment relationship, the company is responsible for the payment of direct and indirect taxesas well as collecting the FGTSand, depending on the case, the CPP or CPRB.

In addition, it is necessary to have a labor consultancy that closely monitors the possible communications sent by the supervisory bodies, through the DET - Electronic Workplace Domicile.

The importance of labor consultancy and accounting advice

Count on a labor consultancy is essential for the correct drafting and management of employment contracts.

An accounting consultancy can advise on how to structure contracts, ensuring that all rights are respected and that the company complies with the law.

This consultancy also helps to choose the best type of contract for each situation, avoiding mistakes that could lead to labor liabilities and problems with the Labor Justice.

To avoid a headache, it is very important to consider that:

• The company must be attentive to changes in legislation and periodically review employment contracts.
• In addition, it must adapt its contractual models to suit the new demands of the market.

We must remember that, the company can change the type of employment contract as the scenario changes, as long as this happens with the agreement of all parties and without jeopardizing employees' rights.

Challenges in managing types of employment contract

Managing the different types of employment contract requires constant attention and updating.

• Errors in drafting or amending contracts can result in litigation and additional costs for the company.
• In addition, the administration of these contracts requires strict control of deadlines, ancillary obligations and compliance with labor rights.

That's why investing in an accounting and labor consultancy is fundamental to maintaining compliance with legislation and operational efficiency.

The importance of updating employment contracts

The employment contracts are not static and may need to be revised over time.

Factors such as changes in the market, salary adjustments, new operational demands and changes in legislation may require adjustments to contracts.

Faced with these changes, it is very important to changing the type of employment contract in e-Socialin order to avoid problems with supervisory bodies.

This constant updating ensures that contracts reflect the reality of the company and protect the rights of both parties.

Practical tips for managing different types of employment contracts

To correctly implement the types of employment contractYou need to follow a few practical steps:

1. drawing up an internal manual: Create a document detailing the procedures for drawing up, amending and terminating employment contracts. This will help standardize processes and avoid inconsistencies.

2. training the management team: The team responsible for people management must be up to date on the rules of labor legislation. Invest in training to follow the rules and avoid headaches.

3. specialized consultancy: Relying on an accounting firm that provides comprehensive advice and helps you keep all your obligations up to date is also very important.

Conclusion

In short, the types of employment contract are essential tools for organizing labour relations.

Each modality has its own particularities and advantages, and the choice of the best model depends on the job profile, the company's needs and growth objectives.

Although open-ended contracts offer greater stability and security for workers, fixed-term, intermittent, teleworking and freelance contracts can be more advantageous in certain situations.

Know which type of employment contract is best each case requires a careful analysis of the legal aspects, labor rights and tax impacts.

In addition, the company may need to change the type of employment contract as needs evolve and market challenges arise, as long as the employee agrees and is not harmed in any way.

Given all the details surrounding the subject, investing in labor consultancy and specialized accounting is essential to avoid errors, reduce risks and optimize operating costs.

The constant updating of contracts and the use of technological tools contribute to improving people management, ensuring that all workers' rights are respected and that the company operates transparently and efficiently.

By adopting a proactive stance in contract managementIn this way, the company not only improves its relationship with its employees, but also strengthens its organizational structure to face the challenges of the market.

Find out more about CLM Controller Contabilidade's labor advisory services

If you are looking for expert advice on types of employment contract and want to optimize the management of your team safely and efficiently, contact CLM Controller Accounting.

Our team of labor consultancy is ready to offer personalized support, helping you to structure appropriate contracts, reduce risks and ensure compliance with all legal obligations.