How to create offer letters for employees in Portugal
If you’re hiring an employee outside of your region, you’ll want to ensure that you’re compliant with any international employment regulations. This is especially critical if you’re hiring an employee based in Portugal, a country known for having high levels of protection for workers. Portugal follows the labor laws of the European Union, plus the Portuguese Constitution and Labor Code regulate working hours, vacations, wages, and more.
In Portugal, a written document isn’t technically required for permanent employment—i.e. the contract can be a written or verbal agreement. In contrast, fixed-term, part-time, and other types of contract work do require a contract.
Even though a contract isn’t mandatory for a full-time employee, it’s highly recommended that you draft up a job offer letter to outline the role’s terms and conditions of employment. This will protect you and help you avoid costly legal disputes should issues arise.
Here’s all the information you need to send a comprehensive and legally compliant offer letter to a full-time employee in Portugal.
Portugal job offer letter checklist
- Position (job title), job description, start date, and trial periods. Outline the job duties and explain that the prospective employee’s suitability for this role will be evaluated during a trial period (known as a período experimental in Portuguese). In Portugal, trial periods may vary from 15 to 240 days depending on the role. For example, probation periods may be 90 days for typical full-time employees, up to 180 days for highly technical or complex roles, and 240 days for management or directorate roles.
- Working hours. Note the daily and weekly working times. As you outline the working hours, keep Portuguese labor laws in mind. In Portugal, the limits for normal, full-time work are 40 hours per week or eight hours per day. Employees are entitled to breaks every five hours—these typically take place during a one to two-hour lunch break. Employers must give their workers at least one day off per week, and workers are protected to rest for 11 straight hours between two working days. If you want your employee to work overtime (more than eight hours per day), you and the employee need to agree to the extra hours and you must provide both additional compensation and adequate rest.
The legal age for work in Portugal begins at 16. However, if your employee is between the ages of 16 and 18, the laws on working hours become more restrictive. Those younger employees are capped at seven hours of work per day, require a one to two-hour break after four hours of work, require a minimum of two days of rest per week, and are not allowed to work at night. - Compensation and benefits
- Salary. Specify the employee's monetary compensation in euros, in addition to any other compensation they may receive, such as bonuses, allowances, insurances, or equity compensation (see more below). If you’re hiring minimum-wage workers, be aware that Portugal updates its minimum wage annually per cost of living changes and income policy.
In your contract, note the pay periods and frequency of payments, keeping holiday subsidies in mind. Per Portuguese law, salaries are split into 14 payments throughout the year rather than 12, with pay doubled as Christmas holiday and summer holiday bonuses. This can be handled in one of two ways:- Pay 50% of both the allowances before the summer holidays (typically in June) and before Christmas, with the remainder paid out throughout the other pay periods of the year.
- Pay the subsidies in full before the respective holidays.
- Equity. If applicable, specify any equity compensation they will receive. This might include stock options, restricted stock units (RSUs), and stock purchase plans.
- Benefits. Benefits can be outlined in the offer letter, but be sure to address them in general terms so that an amendment to the offer letter isn't required if they change in the future In Portugal, the following benefits are mandatory for full-time employees:
- Meal allowance. Employers are required to pay meal allowances for each work day. These meal allowances are taxable unless paid through a tax-exempt card or ticket at (up to €8.32 per day).
- Workers compensation in case of a workplace accident
- Vacation entitlements
- Pension plans and retirement contributions
- Employee training. Full-time employees have the right to receive at least 40 hours of training per year to enhance their professional growth. Employers must either provide this or allow employees to pursue training at their convenience, which may take place during work hours.
These benefits are not mandatory, but popular: - Company cars or car/transportation allowances
- Work-from-home or flexible work policies
- Health insurance (especially for specialized care)
- Life insurance
- Bonuses or commissions
- Salary. Specify the employee's monetary compensation in euros, in addition to any other compensation they may receive, such as bonuses, allowances, insurances, or equity compensation (see more below). If you’re hiring minimum-wage workers, be aware that Portugal updates its minimum wage annually per cost of living changes and income policy.
- Vacation. Detail your company’s vacation leave policy. Full-time workers in Portugal are entitled to 22 working days of paid leave each year. There are also 13 national holidays and several holidays specific to Portuguese regions, which are not included in those 22 days of paid leave. Portuguese employees are also entitled to sick leave if they are unable to work for more than three days—those days are not paid for by the employer but, rather, by Portuguese social security.
- Termination policy. Portugal provides a great deal of protection for workers around job termination. In your contract, clearly outline your terms for termination. In Portugal, you may only legally dismiss an employee if their behavior has made it impossible to continue their employment, if they are unproductive, if they generate low-quality work, or if they are no longer suitable for the job. In the case of small companies, you may terminate them if you are collectively dismissing several employment contracts or several departments; in the case of large companies, you may terminate employees if you are eliminating departments. Employees are also entitled to any unclaimed holiday pay upon termination. You may not fire full-time Portuguese employees at will. The required amount of notice varies depending on how long they have been employed:
- Less than one year: 15 days
- One to five years: 30 days
- Five to 10 years: 60 days
- 10+ years: 75 days
Note: Workers who are pregnant, have given birth within the past four months, are breastfeeding, or are on parental leave are protected from termination.
- Confidentiality and non-disclosure. If there are confidentiality or non-disclosure agreements required for this job, outline them in detail. Non-disclosure agreements (NDAs) are the preferred way of protecting trade secrets in Portugal and are considered legally binding.
- Contact information, including phone number. Per Portuguese law, you must identify all parties involved and include their address or location.
- Non-compete and non-solicit agreements. Include provisions outlining the employee’s non-compete and non-solicitation responsibilities after leaving your company. But tread carefully, as restrictive covenants are typically unenforceable in Portugal except in certain cases, such as when the activity of the employee is likely to cause harm to the employer or if compensation is granted in exchange for the non-compete agreement.
- Other key details. This includes:
- Any collective bargaining instruments available to resolve employment disputes.
- Information about the employer’s accident insurance policy and employee compensation funds, which are required under Portuguese law. Include your occupational accident insurance policy number and the identification of the insurer, as well as information for the employee compensation fund.
- Place of work. If there is no fixed location (such as an office), indicate that the place of work is flexible.
- List out any contingencies for the offer, such as satisfactory results from a routine background check, signing company policy documents, or proof of their eligibility to legally work in Portugal.
- Request that the employee signs and returns the offer letter to confirm their acceptance of the job before their start date.
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Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
last edited: March 26, 2024
