Among the measures announced by the Brazilian Federal Government in the afternoon of March 18th, 2020 is the deferral for a three-month period of the obligation by the employer to pay amounts in connection with both the Guarantee Fund for Length of Service (FGTS), and the Simplified Taxation System (Simples Nacional), with the goal of reinforceing the cash situation of companies operating in Brazil.
Measures related to Labor Law were also announced to render more flexible certain aspects of the Consolidation of Labor Laws – CLT, in order to contain any increase in the unemployment rate for the duration of the State of Emergency ordered in place by the President of Brazil . Among these labor measures is the flexibilization of discussions between employee and employer, when now individual agreements will prevail over the legal provisions about the matter, all within the limits provided for in the Federal Constitution in respect of labor matters.
Another relevant aspect of these Labor law measures is the possibility of employers reducing the work journey by 50%, with a corresponding reduction of the salary paid to the employees affected by such reduction; suspension of each employee’s employment contract as long as the employee is guaranteed payment of half of his/her existing salary (with a minimum of one monthly minimum wage); the possibility of transferring the employees to home office with a 48-hour prior notification; advance vacation time for workers who have not accrued vacation time yet; granting of individual or collective vacations with a (minimum) 48-hour prior notification; elimination of the need to communicate collective vacations to the labor unions and to the Ministry of Economy; implementation of a more dynamic “bank of hours” (comp. time); advance of non-religious holidays; and suspension of the obligation to carry out medical examinations periodically and at the time of termination of employment, all with a view to minimizing the spread of the Covid-19 virus, its financial consequences and the resulting increase in the burden on the public and private health systems.
We are available to assist you in this moment of crisis to ensure the adoption of the most appropriate measures for your type of business, customized to your interests and peculiarities.