The minimum wage indexation, a relatively high tax wedge on labour, and the policy focus on consumption stimulus have contributed to a fast rise in labour costs in Brazil. Labour regulations emphasise conditions of work and pay and are quite rigid. This sometimes impedes the establishment of mutually beneficial labour agreements, resulting in discrepancy between common practice and the law and posing legal risks to companies. Policies for the unemployed or those who are at risk of losing their jobs consist predominantly of compensation measures, although there are efforts to enhance market insertion measures. Skills improvement and self-employment as part of the labour market insertion programmes receive more attention, particularly for young people who account for the majority of the unemployed. However, the training component of the labour programmes seems to be inadequate in terms of the resources involved and its outreach, whereas it could play an important role in labour market adjustment to support the innovation process.