Employer bankrupt or in judicial reorganization in Brazil: how workers get paid

When an employer goes bankrupt, each worker's labor claims, up to 150 minimum wages, are among the first to be paid (Law 11,101/2005, art. 83). In judicial reorganization, the plan must pay overdue labor claims within 1 year, and unpaid wages for the last 3 months, up to 5 minimum wages per worker, within 30 days (art. 54).

Quick summary

• Bankruptcy: labor claims up to 150 minimum wages per worker have priority; the excess becomes an ordinary claim.
• Judicial reorganization: labor claims paid within 1 year; wages for the last 3 months, up to 5 minimum wages, within 30 days.
• Labor lawsuit: continues in the Labor Court until the amount is defined; then the claim is filed in the bankruptcy or reorganization proceeding.
• FGTS and unemployment insurance: bankruptcy ends contracts and allows FGTS withdrawal (FGTS is the Severance Indemnity Fund) and an unemployment insurance application, if requirements are met.
• Partners and the economic group may be liable in some situations.

Step by step

1. Keep documents: contract, payslips, FGTS statement, communications from the employer.
2. Look up the bankruptcy or reorganization case on the State Court website.
3. Check whether your claim is on the list prepared by the trustee.
4. If it is not there or is wrong, file a claim or objection within the deadline in the notice.
5. If you don't have a judgment yet, file a labor lawsuit to determine the amount and ask for the claim to be reserved.
6. Follow payments and creditors' meetings.

Points to watch

• The penalties of arts. 477 and 467 of the CLT (Brazil's Consolidated Labor Laws) do not apply to the bankrupt estate (TST Precedent 388 — the TST is the Superior Labor Court).
• Outsourced workers can claim from the client company — see Outsourcing.
• The claim can be assigned to third parties, but then it loses labor priority.

Frequently asked questions

Will I receive everything in a bankruptcy?

It depends on the bankrupt estate's assets. Labor claims up to 150 minimum wages are at the top of the line, but payment may take time.

Does judicial reorganization suspend my labor lawsuit?

The case continues in the Labor Court until the amount is defined; collection happens in the reorganization court.

Read more in this series

• Enforcement of labor judgments: how to get paid
• Mass layoffs and collective dismissal
• Late wages: what to do
• Unemployment insurance 2026
• Index: complete guide to labor rights