The Provisional Measure establishing the Employment and Income Maintenance Program was published.
It was authorized that employers may reduce working hours and salary by 25%, 50% or even 70% and may suspend the employment contract without the need to offer a professional qualification course or program to the employee.
Whenever there is a reduction in salary or suspension of the contract, the government will provide the employee with the Emergency Benefit for Preservation of Employment and Income, which will be calculated on the monthly amount of unemployment insurance to which the employee would be entitled.
The employee will also have provisional stability during the period of the reduction in working hours and salary or suspension of the work contract, and for the same period after the end of the reduction or suspension.
The provisions of the Provisional Measure may be applied to apprentices and part-time employees.
How will the Program be operationalized?
The company must formalize the individual or collective agreement. Afterwards, it will have 10 days to inform the terms of the negotiation to the Ministry of Economy, which will pay to the employee the benefit within 30 days counted from the formalization of the agreement.
The Ministry of Economy will still disclose how this communication should take place.
If the employer does not meet the 10-day deadline for communication, he/she will be responsible for the employee's full salary for that month.
Requirements for the reduction of working hours and salary:
The hourly rate shall be maintained.
The reduction shall be for a fixed period of not more than 90 days.
The reduction of working hours and salary by up to 25% may be made by individual agreement with each and every employee.
The reduction in 50% or 70% can only be made by individual agreement with employees who earn less than R$ 3,135.00 and with those who have college degrees and receive wages equal to or greater than two times the value of the ceiling of benefits of the INSS (R$ 12,202.12).
In the range between these two amounts, given the possibility of greater salary loss, this 50 or 70% reduction may only occur by collective agreement.
In other cases, the reduction is permitted by means of a collective agreement, in which case percentages different from those set forth in the Provisional Measure may be negotiated.
Requirements for suspension of the employment contract:
The employment contract may be suspended for a maximum of 60 days.
During this period, employee benefits must be maintained.
Employees may not perform any type of service for the employer during the suspension, either partially or remotely, under penalty of the employer being obliged to pay all wages for the period of suspension with the respective charges, in addition to being subject to fines and penalties.
Companies that had gross revenue of more than R$4,800,000.00 in calendar year 2019 are required to pay compensatory aid to employees in the amount of 30% of their salary during the suspension period.
This aid will not have a salary nature, will not integrate the calculation basis of the Withholding Income Tax, social security charges, FGTS and may be excluded from the net income for purposes of determining the corporate income tax and Social Contribution on Net Income of legal entities taxed by the actual profit.
For further information, the Labor Team of our firm is available at nfigueiredo@btlaw.com.br; ninsauriaga@btlaw.com.br and hcarrasco@btlaw.com.br
