Countries › Brazil › Guide › 7. Labor and employment › Labor courts, claims and settlements in Brazil: limitation periods, costs, appeal deposits and arbitration

Labor courts, claims and settlements in Brazil: limitation periods, costs, appeal deposits and arbitration

Last verified: 2026-10-27 · Status: Stable

Employment disputes go to the specialized Labor Courts; claims must be filed within 2 years of the end of the contract and reach back at most 5 years, and every claim must state the value of each request. Since 2017 losing parties pay 5 to 15 percent attorney fees and expert fees, free justice is presumed only up to 40 percent of the social security ceiling, and employers must post an appeal deposit of up to R$14,411.57 for an ordinary appeal and R$28,823.14 for an appeal to the Superior Labor Court from 1 August 2026. Out of court settlements can be ratified by a labor judge within 15 days on a joint petition, and employees earning more than twice the social security ceiling may agree to arbitration.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the last business day before verification. The real moved sharply that day (R$5.0377 on 23 October), so conversions are for orientation only.

Key facts

Limitation period for labor claims	5 yearsCLT art. 11, as of 2026-10-27 · in force
Deadline to sue after the contract ends	2 yearsCLT art. 11, as of 2026-10-27 · in force
Loser pays attorney fees, minimum	5 %CLT art. 791-A, as of 2026-10-27 · in force
Loser pays attorney fees, maximum	15 %CLT art. 791-A, as of 2026-10-27 · in force
Monthly pay up to which free justice may be granted (40 percent of RGPS ceiling, 2026)	3390.22 BRLCLT art. 790 § 3, as of 2026-10-27 · in force
Appeal deposit ceiling, ordinary appeal (from 1 August 2026)	14411.57 BRLCLT art. 899; Ato SEGJUD.GP nº 381/2026, as of 2026-08-01 · in force
Appeal deposit ceiling, appeal for review and embargos (from 1 August 2026)	28823.14 BRLCLT art. 899; Ato SEGJUD.GP nº 381/2026, as of 2026-08-01 · in force
Days for the judge to rule on an out of court settlement	15 daysCLT art. 855-D, as of 2026-10-27 · in force
Monthly pay above which an arbitration clause is allowed (2 x RGPS ceiling, 2026)	16951.1 BRLCLT art. 507-A, as of 2026-10-27 · in force

The rule

1. Claims arising from the employment relationship expire 5 years after each right arose, and in any case 2 years after the contract ends. Only a labor claim filed in court interrupts the limitation period.
Cost to do it: Keep payroll and time records for at least 5 years, and 2 more after each contract ends.CLT art. 11 as worded by Lei nº 13.467 of 13 July 2017, CLT art. 11 caput and §§ 2 and 3, 2017-07-13 official text · verified 2026-10-27

2. Disputes between employees and employers are heard by the Labor Courts (first instance labor courts, regional labor courts and the Superior Labor Court).
Cost to do it: Court costs are set by the CLT and charged to the losing party at the end.CLT art. 643 as worded by Lei nº 7.494 of 1986, CLT art. 643, 1943-05-01 official text · verified 2026-10-27

3. A written claim must identify the court and parties, briefly state the facts and contain a certain and specific request with its value. A claimant who misses the first hearing without legal justification pays costs even if granted free justice, and must pay them before filing again.
Cost to do it: Defense costs; claims now state their value up front, which helps provisioning.CLT arts. 840 § 1 and 844 §§ 2 and 3 as worded by Lei nº 13.467 of 13 July 2017, CLT arts. 840 § 1 and 844 §§ 2 to 5, 2017-07-13 official text · verified 2026-10-27

4. Judges may grant free justice to those earning up to 40 percent of the general social security benefit ceiling, and to anyone who proves insufficient funds. The party that loses on the subject of an expert report pays the expert's fees, even with free justice, unless that party has no court credits to cover them, and the court may not demand an advance.
Cost to do it: Free justice threshold in 2026: 40 percent of R$8,475.55 = R$3,390.22 a month.
Example: An employee earning R$5,000.00 is above the R$3,390.22 presumption and must prove lack of funds to get free justice. / Threshold about US$616.33.CLT arts. 790 §§ 3 and 4 and 790-B as worded by Lei nº 13.467 of 13 July 2017, CLT arts. 790 §§ 3 and 4; 790-B, 2017-07-13 official text · verified 2026-10-27

5. The losing party pays the other side's lawyer fees of 5 to 15 percent of the award, the economic benefit or the updated value of the claim, with reciprocal fees when each side partly loses. For a losing party with free justice the obligation is suspended and expires unless, within 2 years, the creditor shows the party's finances have changed.
Cost to do it: 5 to 15 percent of the amount at stake.
Example: Employer loses a R$100,000.00 award: fees of R$5,000.00 to R$15,000.00 on top. / About US$908.98 to US$2,726.93.CLT art. 791-A inserted by Lei nº 13.467 of 13 July 2017, CLT art. 791-A caput and §§ 2 to 5, 2017-07-13 official text · verified 2026-10-27

6. Litigating in bad faith (for example distorting facts, using the process for an unlawful aim or filing appeals only to delay) carries a fine above 1 percent and below 10 percent of the corrected value of the claim, plus compensation and costs; for very small or inestimable claims the fine may reach 2 times the social security ceiling.
Cost to do it: Up to just under 10 percent of the claim value.CLT arts. 793-A to 793-C inserted by Lei nº 13.467 of 13 July 2017, CLT arts. 793-A, 793-B and 793-C §§ 1 to 3, 2017-07-13 official text · verified 2026-10-27

7. To appeal, the employer must deposit an amount up to a ceiling adjusted every year. From 1 August 2026 the ceilings are R$14,411.57 for an ordinary appeal and R$28,823.14 for an appeal for review (recurso de revista), embargos and appeals in rescissory actions, limited to the amount of the judgment. The deposit is halved for nonprofit entities, domestic employers, individual microentrepreneurs, micro and small businesses; exempt for free justice beneficiaries, philanthropic entities and companies in judicial reorganization; and may be replaced by a bank guarantee or judicial guarantee insurance.
Cost to do it: Up to R$14,411.57 for an ordinary appeal and R$28,823.14 for an appeal to the Superior Labor Court; half for small businesses.
Example: A small business appealing a R$100,000.00 judgment deposits half of R$14,411.57, that is R$7,205.78. / Ordinary appeal ceiling about US$2,619.95; half about US$1,309.98.CLT art. 899 §§ 4, 9, 10 and 11 as worded by Lei nº 13.467 of 13 July 2017; Ato SEGJUD.GP nº 381 of 16 July 2026 of the Tribunal Superior do Trabalho, CLT art. 899; Ato SEGJUD.GP nº 381/2026, 2026-07-16 official text · verified 2026-10-27 · changed: From 1 August 2026 Ato SEGJUD.GP nº 381 of 16 July 2026 raised the appeal deposit ceilings to R$14,411.57 (ordinary appeal) and R$28,823.14 (appeal for review), adjusted by the INPC.

8. An appeal for review to the Superior Labor Court must show transcendence (economic, political, social or legal); the reporting judge may deny it for lack of transcendence. A final judgment may be protested or listed in credit bureaus and the national labor debt register only 45 days after the debtor is served if no guarantee is given.
Cost to do it: Unpaid judgments lead to protest and debtor listings after 45 days.CLT arts. 896-A and 883-A inserted or worded by Lei nº 13.467 of 13 July 2017, CLT arts. 896-A §§ 1 to 6 and 883-A, 2017-07-13 official text · verified 2026-10-27

9. Employer and employee may file a joint petition, each with its own lawyer (the employee may use the union's lawyer), asking the labor court to ratify an out of court settlement. The judge has 15 days to analyze it, hold a hearing if needed and decide. The petition suspends the limitation period for the rights listed, and does not change the 10 day deadline and penalty for termination payments.
Cost to do it: Lawyers' fees for both sides; no deposit.
Example: A settlement of R$50,000.00 at exit is ratified by a judge, giving the employer a court approved release for the items listed. / About US$9,089.75.CLT arts. 855-B to 855-E inserted by Lei nº 13.467 of 13 July 2017, CLT arts. 855-B, 855-C, 855-D and 855-E, 2017-07-13 official text · verified 2026-10-27

10. Employment contracts with pay above 2 times the general social security benefit ceiling may include an arbitration clause, if the employee proposes it or expressly agrees, under the Arbitration Act (Lei nº 9.307 of 1996).
Cost to do it: Threshold in 2026: 2 x R$8,475.55 = R$16,951.10 a month; arbitration fees per institution.
Example: A director on R$25,000.00 a month may agree to arbitration; a manager on R$15,000.00 may not. / Threshold about US$3,081.63.CLT art. 507-A inserted by Lei nº 13.467 of 13 July 2017, CLT art. 507-A, 2017-07-13 official text · verified 2026-10-27

11. Companies and unions may create prior conciliation committees with equal representation (company committees of 2 to 10 members with 1 year terms); a committee has 10 days to hold a session, a signed conciliation is an enforceable extrajudicial title, and the limitation period is suspended while the committee handles the claim.
Cost to do it: Committee members' time; useful for high volume operations.CLT arts. 625-A to 625-H inserted by Lei nº 9.958 of 2000, CLT arts. 625-A, 625-B, 625-E, 625-F and 625-G, 1943-05-01 official text · verified 2026-10-27

Appeal	Full deposit (R$)	Half, small business (R$)	Full deposit (US$)
Ordinary appeal (recurso ordinário)	14,411.57	7,205.78	2,619.95
Appeal for review and embargos (TST)	28,823.14	14,411.57	5,239.90
Appeal in rescissory action	28,823.14	14,411.57	5,239.90

Appeal deposit ceilings from 1 August 2026 (Ato SEGJUD.GP nº 381 of 16 July 2026; CLT art. 899 §§ 9 and 10). USD at R$5.5007.

Worked example

A former employee sues for R$100,000.00 in overtime. The company loses at first instance on R$60,000.00 and appeals, depositing R$14,411.57 (US$2,619.95). If it loses again, it owes the R$60,000.00 plus 5 to 15 percent fees (R$3,000.00 to R$9,000.00) on the part it lost, while the employee owes fees to the company's lawyer on the R$40,000.00 rejected, suspended if the employee has free justice.

Step by step

Keep payroll, time and FGTS records for at least 5 years, and 2 years after each contract ends.
On exit, consider a court ratified settlement (CLT arts. 855-B to 855-E) for disputed items.
For senior hires above 2 times the social security ceiling, consider an arbitration clause agreed or proposed by the employee.
Provision claims using the values stated in the petition (CLT art. 840 § 1).
Budget appeal deposits at the 2026 ceilings or arrange judicial guarantee insurance.

Common traps

Claims can reach back 5 years from filing; a claim filed 23 months after termination still covers older periods within 5 years.
Appeal deposits below the ceiling or judgment amount make the appeal inadmissible; check the ceiling in force on the filing date.
Arbitration clauses for employees below 2 times the ceiling are not authorized by art. 507-A.
A settlement release covers only the items listed; generic full release language is not enough.
Losing employees with free justice rarely pay fees in practice because the obligation is suspended (art. 791-A § 4).

Sources

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