TEMPORARY SIMPLIFICATION OF LABOR RULES – MP 927/2020

The measures adopted by the BR Government as described in the MP(*) 927/2020 and summarized hereafter are intended to provide incentives to local employers, aiming to maintain the economic activity and avoid the increase of the unemployment rate now that the Country is facing a state of public calamity due to COVID-19

(*) MP is an acronym for “Medida Provisória”, herein also referred as MP, which translates to Provisional Measure in English. A provisional measure is a legal act in Brazil through which the President of Brazil can enact laws without approval by the National Congress. There are two requirements for a provisional measure to be used: urgency and relevance of the matter to be regulated."

Key Messages
The purpose of the MP is to facilitate the negotiation between employees and employers and will remain in force for the duration of the state of public calamity. The key matters of the MP have been summarized below:

A - Postponement of FGTS payments:

1. The benefit granted to all employees legally registered in Brazil, due by the employers on a monthly basis;
2. The demand for the payment of FGTS by employers, from March through May 2020, may be temporarily suspended;
3. Employers will be able to utilize such model regardless of the number of employees, the taxation regime, the legal nature, the line of service in which the entity operates;
4. The payments related to the periods listed above can now be settled in up to 6 (six) monthly installments, being due on the seventh day of each month from July 2020, with no interests and fines;
5. The employer must submit the information  by June 20th, 2020, observing that:
   1.  the information provided will constitute the recognition of the debt;
   2.  the undeclared amounts will be considered not settled, hence, in arrears and will require full payment including interest and fines;
6.  In the event of termination of the employment contract, the employer will be obliged to:
   1.  the payment of the corresponding amounts, without penalty and charges, if made on time;
   2.  Make the deposits of amounts as predicted by Law the establish with future mature days will be done immediately as predict by Law
   3. the installments will have their maturity date anticipated for the term appliable to the payment provided for in art. 18 of Law 8.036 of 1990.
7. The installments that aren’t settled within the terms dictated by the MP, will be subject to fines and charges under the terms of art. 22 of Law 8,036 of 1990.

B - Individual Agreements:

During the state of public calamity, employees and employers may enter into individual written agreements with a preponderance to the law, respecting the limits provided for in the Federal Constitution;

C - Working from home:

It allows the employer to alter the work regime (to a home office model or any remote location) to be agreed directly with the employee, with a 48-hour notice in writing or electronically. It is not necessary for such modality to be foreseen in an individual or collective agreement, as well as providing that there is no need for prior registration of employment contracts.

The rules of responsibility for the acquisition, maintenance or supply of technological equipment and/or infrastructure suitable for the exercise of remote work activities, as well as the reimbursement of expenses borne by the employee, must be provided for in a written contract, previously signed or within the term thirty (30) days from the date of change of the work regime.

If the employee does not have the equipment and infrastructure to carry out the work remotely, the employer may provide the employee with the equipment on loan and pay for the infrastructure, not characterizing this payment as a salary amount, that is, there will be no integration of this payment in the employee's remuneration.
The time spent using applications and other means of communication outside the working day does not constitute effective working time, available, a readiness or alert system, provided that there is no contrary provision in an individual or collective Union Agreement.

D - Anticipation of Individual Holidays:

It will be up to the employer to inform the employee about possible vacation anticipation, at least 48 hours in advance, indicating the period to be taken, being certain that the minimum period must be 5 (five) days. (Calendar days)

The employer may also grant the anticipation of vacation even if the acquisition period has not been fulfilled, that is, before the twelve months preceding the employee's right to take a vacation have completed.

Workers belonging to the coronavirus risk group will be prioritized for the enjoyment of individual or collective vacations.

The employer may suspend vacations or unpaid leave for health professionals or those who perform essential functions, provided that the employee is notified in writing or electronic form, preferably 48 hours in advance.

Holiday Pay:

• 1/3 surcharge - the employer may pay the one-third surcharge until the 13th salary payment date. *Both vacations pay a benefit (1/3 of monthly pay) and 13th salary are benefits granted to employees legally registered under “CLT” - the local labor system;
• vacation remuneration - the vacation payment can be made by the 5th calendar day of the month following the beginning of the vacation,.

E - Collective Holidays:

Employers will be able to grant collective holidays by notifying affected workers at least 48 hours in advance, without the need to notify Unions and the Ministry of Economy.

The maximum annual period limit (2 periods) and the minimum limit of consecutive days (10 consecutive days), as provided for in paragraph 1 of article 139 of the CLT.(The Consolidation of Labor Laws: is the body of law that regulates labor relations in the private sector at the federal level in Brazil. It serves as the common legal base for negotiations between employer associations labor union and companies.), are not applicable to collective vacations.

F - Holiday Anticipation:

The employer may be able to anticipate the Holiday breaks of any nature in order to keep the employee at home, as long as such communication is made in writing or electronically at least 48 hours in advance and that expressly indicates the holidays taken advantage of.

The holidays may be used to offset the balance of accumulated working hours (arising from overtime), just as the use of religious holidays will depend on the employee's agreement, upon manifestation on a written agreement.

G - Compensatory time:

Due to the state of calamity, the employer will be able to interrupt his activities and set up a special compensation scheme, through a compensatory time system. Such a model must be established by means of a formal collective or individual agreement, for compensation in up to 18 months, counted from the suspension date of the calamity state.

The time compensation for the recovery of this interrupted time may be made by extending the workday by up to two hours, which may not exceed ten hours a day, as well as the compensation of the hours' balance may be determined by the employer.

H - Occupational Safety and Medicine:

Except for dismissal exams, other occupational, clinical and complementary exams are suspended to avoid overloading the public and private health systems.

The examinations that have been temporarily suspended must be carried out within 60 days, counting from the end of the calamity state, as well as the dismissal examination may be waived if the employee's most recent occupational examination was carried out less than 180 days.

Periodic and occasional mandatory training of employees is also suspended, as provided for in the regulatory standards (NR's) for safety and health at work.

Mandatory training must be carried out within 90 days, from the closure of the state of calamity.

The employer may authorize the training to be performed in the distance learning model, the employer being responsible for ensuring the safety of the activities carried out in the training.

Suspension of Employment Contract for Professional Qualification (Lay Off):

I - Extension of the Workday (Health Establishments):

Health establishments, during the state of public calamity, are allowed, by means of an individual written agreement, even for unhealthy activities and with a 12x36 workday shift, to extend the workday beyond the legal limit in the form of article 61, of the CLT, and adopt scales of extra hours without administrative restrictions.

Overtime hours may be compensated, within 18 months, counting from the closure of the state of calamity, through a compensatory time model, paid as overtime, respecting the remuneration for overtime hours.

J - Other Provisions:

The procedural deadlines are suspended for 180 days, to be counted from March 22nd, for the presentation of defense or administrative appeal arising from a labor infraction notice or notification of FGTS.

Unless proven otherwise, cases of coronavirus contamination will not be considered occupational.

Collective or expiring collective agreements and conventions, within 180 days from the MP publication may be extended by the employer for a period of 90 days.

During the 180-day period from the publication of the MP, Labor Inspectors will act in a guiding manner, unless (i) there is a lack of employee registration; (ii) situations of a serious and imminent risk; (iii) the occurrence of a fatal work accident and (iv) work in conditions similar to slave or child labor.

The Provisional Measure is also applicable to temporary workers, rural workers and, where applicable, domestic workers (such as working hours, hour banks and holidays).

This newsletter has been prepared in order to guide our customers on the main terms of the MP. We remind you that a MP is valid for 120 days and in order to have Law enforcement, it must be considered by the legislative bodies and be processed according to the legal provisions.

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