Provisional Measure No. 944 allows financing the payroll of employees of micro, small and medium-sized companies

Provisional Measure No. 944 was published in the Official Gazette on April 3, 2020, instituting the Emergency Job Support Program.

The Provisional Measure which comes into force on April 6th, 2020 makes available a 40 billion emergency credit line, destined exclusively for financing the payroll of employees of micro, small and medium-sized companies with annual turnover between R$ 360 thousand and R$ 10 million, for a period of two months, limited to two minimum wages (R$ 2,090.00) with the remainder, if any, being borne by the company's cash.

To grant credit under the Program, the participating financial institutions will observe their own credit policies. And they may consider eventual restrictions in credit protection systems on the contracting date and default records in the credit information system maintained by the Central Bank of Brazil in the six months prior to the contracting.

The financing interest rate is prefixed at 3.75% per year and the payment term will be up to 36 months, with a grace period of six months to start payment.

Companies that adhere to the financing will be subject to compliance with the following obligations:

I - to provide truthful information;
II - not using the resources for purposes other than the payment of its employees;
III - not terminate without just cause the employment contract of employees whose payrolls are financed in the period between the date of contracting the credit line and the sixtieth day after receiving the last installment of the credit line.

Failure to comply with these obligations will result in early maturity of the debt.

For further information, the Labor Team of our firm is available at [email protected]; [email protected] and [email protected]