Portugal

Labor Compliance Guide

Labor Requirements

Portugal labor regulation is governed by the Labor Code of 2009. The Labor Code governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, employment relationships.

Hours & Pay Regulations

Normal Working Hours

The normal period of work shall not exceed 8 hours a day and 40 hours a week.  For an employee who exclusively works on weekly rest days, the work hour of such an employee may be increased up to 4 hours a day.

 

The average weekly working time, including overtime, cannot exceed 48 hours, in a reference period established in a collective labor regulation agreement that does not exceed 12 months or fails this in a reference period of 4 months. In calculating the average, annual leave is subtracted from the reference period in which they are taken. The days of absence due to illness and the days of parental leave, initial or complementary, and days off to assist children with disabilities or chronic illness are considered hours worked for the reference period.

 

Reference period – The average duration of work is calculated by reference to a period established in a collective labor regulation instrument that is not longer than 12 months or, failing that, a period of four months.

 

Increasing Working Hours Limit – Through collective agreement the daily limit of 8 hours may be increased up to 4 hours and the duration of weekly work of 40 hours may be increased to reach 60 hours, not counting extra hours worked due to unforeseeable circumstances. The normal working period under such an agreement may not exceed 50 hours on average over a period of two months.

 

An agreement between the employer and employee may increase the normal period of daily work up to 2 hours and for weekly work to reach 50 hours, not counting extra hours worked due to unforeseeable circumstances. If an employee works less than 40 hours in a week, the reduced hours of work per day may not be more than 2 hours a day with the provision of a meal break. Such reduction of hours may be changed based on agreement.

 

The normal daily working hours may be increased up to 4 hours a day: 

      • by agreement between employer and employee or by collective regulation agreement, wherein the normal working week will be a maximum of 4 working days.
      • by collective regulation agreement, to create a work schedule that contains a maximum of 3 consecutive days of work, followed by a minimum of 2 days of rest, wherein the normal weekly period remains at 40 hours, on average, in a 45-day reference period employer via a collective agreement.

An employee will be provided with a 15 minutes tolerance (additional time) for any kind of operation or task which was started but not finished during the duration of normal daily working hours. Such tolerance is exceptional and the additional work done shall be paid if such duration is 4 hours or more at the end of the calendar year. 

 

Working Hour Maps 

The employer shall draw up a working hour map/ schedule taking into account the legal provisions and the applicable collective labor regulation instrument, which must include, name of the employer, activity performed, address of workplace, start and end of the period of work and, if any, day of closure or suspension of operation of the workplace, hours of beginning and end of normal working periods, with the indication of rest intervals, mandatory weekly rest day and complimentary weekly rest, if any, etc.

 

Whenever the work schedule includes shifts, the map must also indicate the number of shifts and those in which there are fewer and the rotation scale, if any. According to the respective scale, the composition of the shifts is recorded in a specific book or computerized form and is an integral part of the work schedule.

 

The employer shall display the work schedule in the workplace to which it relates, in a very visible place. Labor Code, Law No. 7/2009, Sec 203-207, 209, 215.

 

Work Time Banking

An hour bank regime may be instituted by means of collective labor regulation. The normal working hours may be increased up to 4 hours a day and may reach 60 hours a week, with an increase of up to 200 hundred hours per year.

 

Such work hour banking regime may be applied as group time banking to all team, section, or economic unit employees. In such a regime, the normal period of work may be increased to 2 hours per day and may reach 50 hours per week, with the addition of a limit of 150 hours per year. Labor Code, Law No. 7/2009, Sec 208 & 210.

 

Shift Work

Shifts of the different employees must be organized whenever the working period exceeds the maximum limits of the normal working period of 40 hours a week. The working hours of each shift cannot exceed the maximum limits of normal working periods. The employee can only change his shift after the weekly rest day.

 

In case of shift work of continuous nature, work shall be organized in such a way that the employee shall be entitled to 1-day rest in every 7 day period. The employer must have a separate record of the employees included in each shift. Labor Code, Law No. 7/2009, Sec 220-221.

 

Recording Requirement

The employer must keep a record of working hours which must contain the indication of the start and end times of the working time, as well as of the interruptions or intervals that are not included in it, in order to determine the number of hours worked per employee, per day and per week.

 

The employer must have a register of overtime work in which, before the start of overtime work and immediately after its end, the hours at which each of the situations occurs are noted. The employer must keep a record of working hours for 5 years. Labor Code, Law No. 7/2009, Sec 202, 231. 

Overtime

Overtime work is considered to be provided beyond working hours. The maximum duration of overtime work an employee can perform is – 

      • In the case of a micro or small business, 175 hours per year;
      • In the case of a medium or large business 150 hours per year;
      • In the case of a part-time employee, 80 hours per year or the number of hours corresponding to the proportion between the respective normal period of work and that of a full-time employee in a comparable situation, when higher;
      • On a normal working day, 2 hours;
      • On a weekly, mandatory, or complementary day of rest, or a public holiday, a number of hours equal to the normal daily work period i.e. 8 hours;
      • In a half-day of complementary rest, a number of hours equal to half a normal daily work period.

The yearly limit may be increased up to 200 hours per year, by means of collective labor regulation. The yearly limit for part-time employees may be increased, by a written agreement up to 130 hours per year or, by collective labor regulation instrument, up to 200 hours a year.

 

The employer must have a register of overtime work. If the registration of overtime work is violated, the employee will be provided, for each day in which he has worked outside working hours, the right to remuneration corresponding to 2 hours of overtime.

 

Overtime Exception – The notion of overtime does not include:

        • Work performed by an employee exempt from working hours on a normal working day
        • The amount provided to compensate for suspension of activity, regardless of its cause, of a duration, not exceeding 48 hours, followed by a day of rest or holiday, by agreement between the employer and the employee.
        • The 15 additional minutes of tolerance provided for operation or task which was started but not finished during the duration of normal daily working hours. 
        • Professional training carried out outside working hours that do not exceed 2 hours a day;
        • Work performed to compensate for periods of absence from work, carried out at the initiative of the employee, provided that both have the agreement of the employer.
        • The work performed to compensate for vacation termination.

Pay for Overtime

Overtime is paid 25% premium for the first hour and 37.5% premium from the second hour, on a working day. Labor Code, Law No. 7/2009, Sec 226-230, 268. 

Night Work

Night work is considered to be performed in a period that has a minimum duration of 7 hours and a maximum duration of 11 hours. Night work hours are hours between 10 pm and 7 am inclusive of the hours between 12 am to 5 am. 

 

Night employees are considered to be those who provide at least 3 hours of normal night work each day. The normal daily work period for night employees, must not exceed 8 hours per day, on a weekly average. In calculating the weekly average the mandatory or complementary weekly rest days and public holidays are not counted.

 

The night employee must not perform more than 8 hours of work in a 24 hour period in which they perform night work, in any of the following activities, which entail special risks or significant physical or mental tension.

 

Pay for Night Work

Employees who perform work at night will be entitled to a premium of 25% on the regular rate of pay.  The increase of 25 % may be replaced, by means of a collective labor regulation instrument, by:

      • Equivalent reduction in the normal working period;
      • Fixed increase of the basic pay, provided that it does not imply less favorable treatment for the employee.

Exception

The provisions of pay for Night Work shall not apply unless provided for in a collective labor agreement in scenarios where work is performed exclusively at night or in work related to tourism, hospitality, and healthcare. Also, work at night shall not be remunerated, when the payment established for the employee is done so exclusively for night work. Labor Code, Law No. 7/2009, Sec 223 – 224 and 266.

Breaks

The employee shall be entitled to an unpaid rest break after 5 consecutive hours of work, of a duration of not less than 1 hour or more than 2 hours. If the working hours exceed 10 hours in a day the employee will be entitled to break after 6 hours of consecutive work. 

 

The break is considered part of working where an employee is required to stay in the usual working space or close to it, in order to be able to perform normal work in case of need. Labor Code, Law No. 7/2009, Sec 213, 197. 

 

Daily Rest – The employee shall be entitled to a rest period of at least 11 consecutive hours between 2 consecutive daily periods of work.

 

Weekly Rest – The employee shall be entitled to at least 1 day of rest per week. Sunday is the weekly rest day required by law, although in some jobs it is permissible to work on Sunday. The mandatory weekly rest and the period of 11 hours of daily rest must be taken in continuity.

Work On Rest Days

Compensatory Rest from Overtime on Daily Rest

An employee who provides overtime work during the period of daily rest shall be entitled to compensatory rest equivalent to the rest hours so lost and shall be taken on one of the following 3 working days.

 

The daily rest entitlement is not applicable to the employee in administrative or managerial positions when due to unavoidable circumstances employee has to provide work on a daily rest day, or a day of work is divided throughout the day for more than one activity, or when there is a requirement of continuity of production or service provided an equivalent period of compensatory rest will be provided. Labor Code, Law No. 7/2009, Sec 214. 

 

Pay for Overtime on Weekly Rest

Overtime is paid at 50% for each hour or fraction, on a weekly, mandatory or complementary day of rest, or on a holiday. In addition to compensation, if you work overtime on Sunday, you are entitled to a day of paid rest on one of the following 3 days. Labor Code, Law No. 7/2009, Sec 232-233, 268. 

Public Holidays

Below are the 13 mandatory public holidays in Portugal – 

      • New Years – January 1
      • Good Friday;
      • Easter Sunday;
      • Labor Day – May 1
      • Corpus Christi
      • Liberation Day – April 25
      • National Day – June 10
      • Assumption Day – August 15
      • Republic Day- October 5
      • All Saints Day – November 1
      • Independence Restoration Day – December 1
      • Immaculate Conception – December 8
      • Christmas Day – December 25

The Good Friday holiday can be observed on another day with local significance in the Easter period. Certain mandatory holidays can be observed on the Monday of the following week by means of specific gazette legislation.

 

In addition to the mandatory holidays, the Tuesday of Carnival and the municipal holiday of the locality can be observed as a holiday, by means of collective labor regulation or employment contract. Employers and employees can agree to observe the optional holidays on any other day.

 

Work on Public Holidays

Employees who are required to work on a public holiday in workplaces that are not allowed to suspend the operation are entitled to compensatory rest lasting half the number of hours worked or to a premium of 50% of the corresponding remuneration, the choice being up to the employer.

 

Pay for Overtime of Public Holiday

Overtime is paid for the hourly wages, at 50% for each hour or fraction, for work on a holiday.

 

An employee who provides overtime work on a mandatory holiday is also entitled to a compensatory rest day in addition to remuneration, to be taken on one of the following 3 working days. Labor Code, Law No. 7/2009, Sec 234-236, 268 and 269.

Annual Leave

The duration of the annual vacation period will be 22 working days which expires every January 1 (in relation to the previous calendar year), although by collective agreement this can be extended. Holidays must be taken during the calendar year in which they accrue, although it is possible to take them until April 30 of the following year, accumulating them, or not, to the vacation days accrued during that year.

 

In the first year, the employee has the right to 2 working days of vacation per month, with a maximum of 20 days, to be enjoyed after 6 months in employment. If the calendar year ends before those 6 months have elapsed, the holidays can be enjoyed until June 30 of the next year. If the employment duration is less than 6 months, the employee will have the right to 2 working days of vacation for each month of employment.

 

For the purposes of calculating vacation, weekdays from Monday to Friday are considered, rest days are exempted.

 

Timing of Vacation

Vacations are to be taken in the calendar year in which they expire. Vacations may be taken until April 30 of the following calendar year, in combination or not with annual vacation due from the previous year by agreement between employer and employee.  The enjoyment of the vacation period may be taken in parts by agreement between employer and employee, provided that at least 10 consecutive working days are taken at one go.

 

Holiday Pay and Allowance 

Vacation Pay corresponds to that which the employee would receive if the employee was working. Along with the vacation pay, the employee is entitled to a vacation allowance, comprising the basic remuneration and other remuneration benefits that are compensated for the specific way of carrying out the work, corresponding to the minimum duration of the vacation.

 

The holiday allowance must be paid before the start of the holiday period and proportionally in the case of in parts holiday enjoyment.

 

Waiving of Vacation

The employee may waive the vacation days exceeding 20 working days, or the corresponding proportion in the case of vacations in the year his annual leave is due. In respect to the waiving of vacation days, employees shall be paid for the days waived as well as the work the employee may perform on such waived vacation days.

 

Scheduling of Vacation Period

In the absence of an agreement, the employer shall set the vacation in such a way that the vacation shall not start on a weekly rest day. In a small, medium, or large company, the employer can only schedule the vacation period between 1 May and 31 October, unless the collective labor regulation instrument or the opinion of the employees’ representatives allows for a different season.

 

The employer shall prepare a vacation map, indicating the start and end of each employee’s vacation periods, until April 15th of each year and keeps it posted in the workplace between this date and October 31st.

 

Termination 

In case of termination of the employment contract subject to prior notice, the employer may determine that the vacation takes place immediately before termination. Upon terminating the employment contract, the employee is entitled to receive vacation pay and the respective allowance:

      • Corresponding to overdue and unpaid vacations;
      • Proportional to the length of service provided in the year of termination.

Violation of the Right to Vacation

If the employer does not allow the employee to take a vacation, the employee shall be entitled to compensation in the amount of 3 times the remuneration the employee is entitled to, for the vacation missed, which must be taken by April 30 of the following calendar year.

 

Annual leave during Illness

If the employee is ill, the annual leave shall not start or be suspended provided that the employer is notified of it. In such case the vacation shall take place after the end of the illness period, such period will constitute the remaining leave duration.  

 

An employee shall be entitled to remuneration in the event of the total or partial impossibility of taking the vacation due to the employee’s illness for the vacation period not taken until April 30th of the following year.

 

Holiday Closure

Whenever it is compatible with the nature of the activity, the employer may close the workplace or the establishment, totally or partially, for employees’ holidays:

        • Up to 15 consecutive days between May 1st and October 31st;
        • For a period exceeding 15 consecutive days when so established in a collective regulation instrument or upon a favorable opinion from the employees’ committee;
        • For a period of more than 15 consecutive days, between 1 May and 31 October, when the nature of the activity so requires.
        • For five consecutive working days during the Christmas school holiday season.
        • A day between a holiday that occurs on Tuesday or Thursday and a weekly rest day.

Labor Code, Law No. 7/2009, Sec 237-247.

Minimum Wage

Effective January 1, 2021, the minimum wage in Portugal is 665 €.

 

Christmas Bonus – An employee is entitled to a Christmas bonus equal to 1 month’s pay, which must be paid by December 15th of each year. The value of the Christmas bonus is proportional to the length of service provided in the calendar year. Labor Code, Law No. 7/2009, Sec 263, 

Special Leave

Sick Leave

Employees shall be entitled to a maximum of 30 days of paid sick leave over a period of 12 months. Employees who are consecutively or in parts employed for a period of 6 months shall be entitled to up to 1095 days of paid sick leave. The leave is paid after the 4th day of incapacity from work.  The daily amount of the allowance is calculated by applying a percentage to the beneficiary’s reference remuneration. This percentage varies depending on the duration and nature of the disease.

Pay – The Employer is not required to pay sickness cash benefits to sick employees. Benefits are paid by the Social Security Institute from the fourth day of illness up to 30 days. The amount of sickness benefits depends on the length and nature of the illness. The employee is remunerated with 55% of the pay for 30 days of sick leave, 60% from 31 to 90 days, 70% from 91 to 365 days & 75% any days beyond 365. 
Parental Leave

Parental leave shall consist of the following kind of leave – 

      • Initial parental leave;
      • Exclusive initial parental leave from the mother;
      • Initial parental leave to be taken by the father due to the mother’s impossibility;
      • Exclusive parental leave from the father.

Initial parental leave

The working mother and father shall be entitled, for the birth of a child, to an initial parental leave of 120 or 150 consecutive days. The leave can be shared between both parents after childbirth. The leave can be taken simultaneously by parents between 120 and 150 days.

 

The leave can be increased by 30 days, in the case of each parent enjoying, exclusively, a period of 30 consecutive days, or two periods of 15 consecutive days. In the case of multiple births, the period of leave can be increased by 30 days for each child. If the child is hospitalized immediately after the leave due to the need for special medical care for the child, the leave is increased for the hospitalization period, up to the maximum limit of 30 days.

 

If the parental leave is not shared by the mother and father, the parent who takes the leave informs the respective employer, up to 7 days after delivery, of the duration of the leave and the beginning of the respective period, attaching a statement from the other parent stating that he/she shall not take the initial parental leave. An employee may be entitled to unpaid to accompany a pregnant woman who travels to a hospital unit located off the island residence for delivery when follow-up is essential.

 

Exclusive Parental Leave for Mother

A mother can take up to 30 days of initial parental leave before delivery. The mother must have 6 weeks’ leave after childbirth. A medical certificate is required to be provided 10 days in advance. Pregnant employees have the right to be released from work for prenatal consultations, for the time and number of times necessary. The employee is entitled to three exemptions from work for consultations within the scope of each cycle of medically assisted fertility treatment.

 

Initial parental leave to be taken by one parent if the other is unable

The father or mother is entitled to unpaid leave, in the following cases:

      • Physical or mental incapacity of the parent who is taking the leave, as long as it remains;
      • Death of the parent taking the leave.
      • In the event of death or physical issue for the mother’s mental health, the initial parental leave to be taken by the father has a minimum duration of 30 days. In the event of death or physical or mental incapacity of a non-working mother within 120 days after delivery, the father is entitled to leave of 30 days.

Exclusive Parental Leave for Father

The parental leave of 20 working days, consecutive or divided, is mandatory for the father in the 6 weeks following the child’s birth, 5 of which are taken consecutively. The father is also entitled to 5 working days of leave, consecutive or interpolated, provided that they are taken simultaneously with the taking of the initial parental leave by the mother. In the case of multiple births, two days are added for each twin.

 

Pay

If the employee chooses to take the initial parental leave of 120 days, the employee will receive 100% of the remuneration, if the employee chooses the 150 days, they will only receive 80% from the Ministry of Social Security. Exclusive Parental leave for the mother and/ or father stated above shall be paid for at 100% by the Ministry of Social Security. Labor Code, Law No. 7/2009, Sec 40-43, 46-46A, 252A, 253.

 

Breastfeeding Break

An employee is allowed to take paid breastfeeding breaks which can be taken in two different periods with a maximum duration of 1 hour each for a child up to the age of 1 year. In the case of multiple births, the duration is increased by an additional 30 minutes for each twin. If the employee works part-time, the daily allowance for breastfeeding is reduced in proportion to the respective normal working period, and cannot be less than 30 minutes. Labor Code, Law No. 7/2009, Sec 47.

 

Leave in a situation of clinical risk during pregnancy

A pregnant employee who is in a situation of clinical risk for herself or for her unborn child, and the employer does not provide her with work compatible with her state and professional category, shall be entitled to unpaid leave, for the period of time as stated by medical prescription.

 

Leave to travel to a hospital unit located outside the island of residence for delivery

A pregnant employee who travels to a hospital unit located outside their island of residence for delivery, due to the unavailability of technical and human resources on the island of residence, is entitled to leave for the period of time that is stated in a medical prescription. The spouse employee who lives in a partnership or in the common economy, a relative or a relative in the straight line or in the 2nd degree of the collateral line can also take appropriate time off for such purpose. Labor Code, Law No. 7/2009, Sec 37-37A and 252A.

Termination of Pregnancy Leave

In case of termination of pregnancy, an employee shall be entitled to unpaid leave between 14 and 30 days. Labor Code, Law No. 7/2009, Sec 38

Supplementary Parental Leave

An employee (father and mother) are entitled to unpaid complementary leave, for assistance to their birth child or adopted child of not more than 6 years, in any of the following modes:

      • Extended parental leave, for 3 months;
      • Part-time work for 12 months, with a normal working period equal to half the full time;
      • Interim periods of extended parental leave and part-time work where the total duration of absence and reduced working time is equal to normal three-month periods of work.

The father and mother may be entitled to the leave in a consecutive manner or in part in 3 separate periods, whereby one parent can enjoy the leave at one time. 

 

If both parents intend to simultaneously take the leave and are at the service of the same employer, the employer may postpone the leave of one of the parents, provided that the respective grounds are provided in writing. Labor Code, Law No. 7/2009, Sec 51.

Adoption Leave

In the case of the adoption of a child under the age of 15, employees are entitled to adoption leave of 120 or 150 consecutive days, the enjoyment of which they can share after the adoption of a child. In the case of multiple adoptions, the period of leave can be extended by 30 days for each adoption in addition to the first. The leave can be shared between both parents after adoption.

 

In the event of the incapacity or death of the applicant for adoption during the leave, the surviving spouse, who is not a candidate for adoption and with whom the adopter lives in the communion of table and housing, is entitled to leave corresponding to the period not taken or to a minimum of 14 days.

 

Pay -Adoption leave is paid for by the Social Security Ministry. Labor Code, Law No. 7/2009, Sec 44.

Leave to take care of a child with chronic illness, disease, cancer, or disabilities

Parents are entitled to unpaid leave for a period of up to 6 months, extendable up to 4 years, to assist children with disabilities, chronic illness, or cancer. If the child with a disability, chronic illness, or cancer disease is 12 years of age or older, the need for assistance is confirmed by a medical certificate. The leave may be extended up to a maximum limit of 6 years, in situations of need to extend assistance, confirmed by a medical certificate.

 

Parents of minors with disabilities or chronic illness, aged no more than 1 year, are entitled to a reduction of 5 hours from the normal weekly working period, or other special working conditions, to assist the child. Labor Code, Law No. 7/2009, Sec 53, 54

Leave for Sick Child

An employee shall be entitled to unpaid leave from work to provide unavoidable and essential assistance, to a child under the age of 12 or, regardless of age, to a child with a disability or chronic illness, up to 30 days a year or throughout the period of eventual hospitalization.

 

The employee may be absent from work for up to 15 days a year to provide unavoidable and essential assistance in the event of illness or accident to a child aged 12 or over. Labor Code, Law No. 7/2009, Sec 49.

Child Care Leave

After the supplementary leave is exhausted, parents are entitled to consecutive or in parts unpaid childcare leave, up to a limit of 2 years. In the case of a third child or more, the leave is limited to 3 years. Labor Code, Law No. 7/2009, Sec 52. 

Leave for Assisting Grandson

An employee shall be entitled to unpaid leave for up to 30 consecutive days, following the birth of a grandson who lives in communion and who is the son of a teenager under the age of 16. The employee shall also be on leave, in substitution of the parents, to provide unavoidable and essential assistance, in the event of illness or accident, to a minor grandchild or, regardless of age, with a disability or chronic illness. Labor Code, Law No. 7/2009, Sec  50.

Marriage Leave

Employees are entitled to 15 consecutive days of unpaid leave for marriage. Labor Code, Law No. 7/2009, Sec 249. 

Education Leave

An employee who is a student may take an unpaid leave of absence due to the provision of an assessment test –  

      • On the day of the test and the immediately preceding it
      • In the case of tests on consecutive days or more than one test on the same day, the days immediately preceding are as many as the tests to be given.

The immediately preceding days include weekly rest days and holidays. Absences cannot exceed 4 days per subject in each academic year. The right to leave can only be exercised in two academic years concerning each subject. Labor Code, Law No. 7/2009, Sec 91.

Bereavement Leave

Employees are entitled to 5 consecutive days of paid leave following the death of a spouse, parent, stepparent, child, or domestic partner. They are entitled to 2 days of paid leave following the death of a sibling, grandparent, or grandchild. Labor Code, Law No. 7/2009, Sec 251.

Family Care Leave

An employee shall be entitled to an unpaid leave of up to 15 days a year to provide unavoidable and essential assistance, in the event of illness or accident, to a spouse or partner, or relative living with the employee. 

 

A duration of 15 days per year is added, in the case of providing urgent and essential assistance to a person with a disability or chronic illness, who is a spouse or partner of the employee. Labor Code, Law No. 7/2009, Sec 252.

Last updated on: June 29th, 2021