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Things You Need to Know About Hiring Employees in Portugal

By Bernardo Barbosa

Published on 9 January 2024

6mins read

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Portugal has a well-established legal framework for hiring employees, which includes various legal requirements that employers must adhere to. These requirements ensure that both employers and employees are protected and fair employment practices are followed.

There are several benefits of hiring employees in Portugal, such as access to a skilled and diverse workforce, favorable tax incentives, and a business-friendly environment. Understanding the legal obligations and advantages of hiring in Portugal is crucial for businesses looking to expand their operations in the country.

When hiring employees in Portugal, employers must comply with several legal requirements. These include registering the employment contract with the Portuguese Social Security system and paying taxes on behalf of the employee.

Employers are also required to provide employees with a written employment contract that outlines the terms and conditions of their employment, including information on working hours, remuneration, and leave entitlements.

Finally, they must adhere to the minimum wage requirements set by the government and ensure compliance with health and safety regulations in the workplace.

Benefits of hiring employees in Portugal

Hiring employees in Portugal comes with several benefits:

  • Portugal has a skilled and educated workforce, which can contribute to the success of your business.
  • The labor costs in Portugal are competitive, making it an attractive location for companies looking to expand.
  • Portugal has a favorable business environment, a stable economy, and supportive government policies.
  • Hiring local employees can help with language and cultural barriers, ensuring effective communication and integration within the workplace.
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Recruitment Process

Generally, the recruitment process in Portugal is characterized by three steps of negotiation: candidate sourcing, interviewing, and contract negotiation. Let's learn a little bit more about each one of them:

1. Job advertising and sourcing candidates

When it comes to job advertising and sourcing candidates in Portugal, there are a few key considerations to keep in mind. Firstly, it is important to use a variety of channels to reach a diverse pool of candidates. This can include online job boards, social media platforms, and professional networking sites.

Additionally, outline the job requirements and qualifications to ensure that only qualified candidates apply, and consider partnering with local recruitment agencies or professional organizations to tap into their expertise and networks.

2. Interviewing and selection

During the interviewing and selection process, it is important to carefully evaluate candidates to ensure they possess the necessary skills and qualifications for the position. This can be done through a combination of structured interviews, skills assessments, and reference checks.

It's also important to consider cultural fit and the candidate's potential for growth within the organization. By conducting a thorough and objective selection process, employers can increase the likelihood of hiring the right person.

3. Offer and contract negotiation

Once you have selected the ideal candidate, it is time to make an offer and negotiate the employment contract. Ensure that the offer includes all the necessary details such as salary, benefits, and start date.

During the negotiation process, both parties should discuss and agree on the terms and conditions of the contract, including working hours, probation period, and any additional clauses.

It is important to thoroughly review the contract to ensure it complies with Portuguese labor laws and workers' compensation insurance and protects the interests of both the employer and the employee. Seeking legal advice can be beneficial to ensure a fair and legally binding agreement.

Employment Contracts and Regulations

Hiring employees in Portugal isn't just about finding the right candidates for the job and offering them a legal contract. Understanding the intricacies of Portuguese employment contracts and regulations is as important.

In a nutshell, this is what you should be aware of:

Types of employment contracts in Portugal

In Portugal, there are several types of employment contracts that employers can offer to their employees. These include:

  • Permanent contracts: These contracts provide employees with long-term job security and stability.
  • Fixed-term contracts: These contracts are for a specific time or project.
  • Temporary contracts: These contracts are used for temporary or seasonal work and are usually paid via Green Receipts.
  • Part-time contracts: These contracts are for employees who work fewer hours than full-time employees.

Working hours and leave entitlements

In Portugal, the standard working week is 40 hours, with a maximum of 8 hours per day. Overtime may be required, but it should not exceed 150 hours per year. Employees are entitled to 22 paid leave days per year, which can increase to 25 days after 10 years of service.

There are also public holidays and special leave entitlements for events such as marriage, childbirth, and bereavement. It is important for employers to respect these regulations to maintain a healthy work-life balance for their employees.

Termination and severance

Terminating an employment contract in Portugal must follow the legal requirements outlined in the labor laws. Notice periods are typically required, with longer notice periods for employees with longer service. Severance pay may also be required based on the length of service.

Finally, employers should be aware of the circumstances under which termination is considered unfair or discriminatory. Seeking legal advice is recommended to ensure compliance and avoid any potential legal consequences.

Key Considerations

So, what have we learned today? This quick summary should provide you with a clear outline of how to hire, recruit, and ensure compliance with Portuguese employees. Nevertheless, don't hesitate to ask for professional legal advice whenever you feel like you're out of your league, as the information listed in this article can be subject to changes.

Tips for hiring employees in Portugal

  • Understand the legal requirements for hiring employees, including obtaining the necessary work permits and visas.
  • Be aware of the benefits of hiring employees in Portugal, such as the country's favorable tax system and access to a highly skilled workforce.
  • Ensure compliance with labor laws and understand the employment contracts and regulations in Portugal, including the different types of contracts, working hours, and leave entitlements.

Tips for successful employee recruitment in Portugal

  • Thoroughly evaluate the skills and qualifications of candidates to ensure they are the right fit for the job.
  • Network and build relationships with local professionals and organizations to find qualified candidates.
  • Provide clear and detailed job descriptions to attract the right candidates and set expectations from the beginning.
  • Being aware of cultural differences and adapting the recruitment process accordingly can contribute to a successful hiring outcome.

Tips for ensuring compliance with labor laws

  • Ensure that you're familiar with the employment regulations and obligations set by the Portuguese government. This includes properly documenting employment contracts, adhering to working hour regulations, and providing employees with the required benefits and leave entitlements.
  • Regularly review and update employment policies and practices to maintain compliance with labor laws and create a positive work environment for employees.

Now that you've gone through our guide for hiring employees in Portugal, you're finally ready to make the most of one of the most skilled, cost-effective, and professional labor forces in Europe!

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Written by Bernardo Barbosa

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