eSocial: system generates large workflow for companies

Although much is said that eSocial simplifies obligations and processes, entrepreneurs must follow a series of steps, from the preparation to the effective sending of the information.

eSocial is a government platform for the digital registration workers’ 15 tax, labor, and social security obligations related. The system is one of the Sped modules and integrates the data sent to Social Security, Cash, Federal Revenue, and Ministry of Labor.

In fact, eSocial does not bring changes to legislation, but it creates new ways to the Treasury identify business failures, whether due to error, omission or failure to present the information. Data cross-referencing in the digital environment is the government's great instrument to map inconsistencies and, consequently, apply the appropriate fines and penalties.

The system not only imposes on companies the need to adapt to a new work routine and structure, but also goes beyond, requiring businesses in Brazil to establish a new organizational culture.

Schedule

Deployment timeline of eSocial	Group 1 Big companies*	Group 2 Other companies **	Group 3 Public agencies
Employer registration and tables	jan/18	jul/18	jan/19
Worker’s data and his/he relationship with the companies (non-periodic events)	mar/18	oct/18	mar/19
Payroll	may/18	Nov/2018***	mai/19
Replacement of GFIP (Social Security Information Payment Sip) and cross compensation	aug/18	jan/19	jul/19
Occupational safety and health data	jan/19	jan/19	jul/19

*Companies earning gross revenues greater than BRL 78 million.

**Private companies earning annual revenues less than BRL 78 million (those not classified as micro and small companies or individual microentrepreneurs).

***Mandatory joining deadline for micro and small companies and individual microentrepreneurs with employees.

If one of the deadlines is not met, employers cannot include the data in the other stages and, since then, they are already subject to penalties or fines.

In this movement of change, attention to some processes is essential. Based on its experience in customer service to suit the system, Domingues and Pinho Contadores lists some points to be adjusted.

These DPC’s actions preceded the eSocial effective date. All this work behind the scenes was necessary to prepare the clients and to minimize possible failures in the phase in which they effectively should meet the obligation earning.

See below:

1. Compilation of employer data and system set-up

Set-up of system is one of the critical points in eSocial compliance. Many errors when filing of information can be solved with the correct events and the headings table set-up.

One of the works the DPC carried, for example, was the creation of a single, standardized table of events, which associated almost 5000 identified events with the 200 eSocial headings. From then on, the internal systems were framed in the table of headings.

The process also required an updating of parameters at the software adopted by the DPC, such as the rates levying to INSS, FGTS, IR, among others, to each of the attended companies.

eSocial also imposes the need to revise the positions and salaries policies, as for the system, employees classified in the same function must have the same remuneration. Another fundamental point is the analysis of the CBO (Brazilian Classification of Occupations) of all functions the companies have enrolled, since the employee education level cannot be in disagreement with the occupied position.

2. Employees’ register qualification

Another necessary measure is the checking of the employees' register data, correcting possible inconsistencies, for example, the name of the employee in the company's internal register different from the name in the CPF or CNIS. Since this can be quite common, either for spelling mistakes or an employee who changed the name after the marriage without updating at the official agencies, the registration with the eSocial may be affected.

To get an idea, DPC checked the data of, approximately, 7000 employees of its clients, mapping the inconsistencies and indicating cases that needed to be settled, which only the employees themselves can do it.

Importantly, these adjustments must be made before sending the information to the digital environment. This is why any kind of mismatch leads to rejection of the event at the eSocial environment.

3. System testing and approval

Another important aspect is the information validation at the approval environment, provided by the system itself, before the actual sending. The tests are necessary at this preparation stage to detect possible inconsistencies at the database and points that need to be adjusted.

It is a kind of training or exercise in which the events are submitted to the system, but there are still chances for corrections. Thus, it is possible to check for flaws and provide the adjustments, a fundamental action to ensure that do not indicate items in disagreement in the eSocial production environment, when it is time to actually send the information.

As in the other topics, DPC also coordinated this preventive action for its clients, in order to guarantee the security of the deliveries.

4. Transmission of information

The taxpayer still has some items to consider Even after the preparatory phase and all the tests, when the moment to transmit eSocial information arrives.

The transmission must meet the logical sequence required by the platform. This is because the data at the files required at first are necessary for processing of what should be included afterwards.

The system follows a chronological order and the facts must be submitted in a way that all makes sense. For example, you should not enter the employee's hiring information, prior to the employer's own basic information, such as CNPJ, core activity, among others.

Thus, DPC supported the clients in data organization and sending, respecting the logical sequence of initial events presentation, events of tables, non-periodic events and periodicals.

For now, work increase

With eSocial, the information that was previously monthly became on time with the generating event, requiring agility and more inputs and validation by the team. This new scenario requires companies to prepare and establish a new working way, either in cases where they directly attend the process or in cases where they outsource the task.

For example, if the information was previously batch-filed in GFIP, now it now should be individually and punctually sent with an .xml file for each employee. The new imposition requires even more organization and full control of internal processes.

In addition, with obligations such as RAIS, CAGED and DIRF with no defined date to be discontinued, it is still necessary to feed in parallel these bases to eSocial until the competent agencies disclose the respective normative acts officiating such statements filing waiver.

This work in duplicity ends up weighing on businesses structure, which has been trying to adapt to the innovations brought by the system while they cannot leave aside even the current tax, labor and social security obligations that eSocial will replace. The fact is that the project does not bring the promised simplification, at least in this initial and transitional moment.

• In summary, it is important to pay attention to the system set-up, to organization of the data and labor information of each employee (positions, functions, working hours, etc.), to revision of payroll benefits and periodic and non-periodic processes to be in compliance with the Register of Labor Events, as well as to check the payroll headings with groups and accounts so that they are in agreement with the tables of the used software.

DPC has been acting in the eSocial service to its clients, while continuing to present the accessory obligations that have accumulated so far. The company also provides customized training and advises businesses on review of internal procedures to adopt best practices, including system set-up and records reviewing until the actual conclusion of the process.

Update: 8/31/2018