Emergency Employment and Income Maintenance Program Created

Provisional Measure (MP) no. 936 established complementary labor measures to deal with the state of public calamity and the public health emergency of international importance resulting from the coronavirus.

03/04/2020

HIGHLIGHTS

Emergency Employment and Income Maintenance Program Created



The Federal Government, through Provisional Measure (MP) no. 936, instituted the Emergency Employment and Income Maintenance Program and established complementary labor measures to deal with the state of public calamity and the public health emergency of international importance resulting from the coronavirus (covid-19).


Emergency Employment and Income Preservation Benefit

Expected to be paid in the event of proportional reduction of working hours and wages and temporary suspension of the employment contract, this benefit will be:

1. funded by Union resources;
2. monthly installment; and
3. due from the date of the beginning of the reduction in the working day and salary or the temporary suspension of the employment contract, subject to the following provisions:
a) the employer shall inform the Ministry of Economy of the reduction of the working day and salary or the temporary suspension of the employment contract, within 10 days, counted from the date of conclusion of the agreement;
b) the 1st installment will be paid within 30 days, counting from the date of the signing of the agreement, provided that the signing of the agreement is informed within the period referred to in the letter “a”; and
4. the Emergency Benefit will be paid exclusively for the duration of the proportional reduction in the working day and salary or the temporary suspension of the employment contract.


Notes:

  • The Ministry of Economy will regulate the form of transmission of information and communications by the employer and the grant and payment of the benefit.
  • Does not prevent the concession and does not change the amount of unemployment insurance to which the employee is entitled.


Proportional reduction of working hours and wages

During the state of public calamity, the employer may agree to a proportional reduction in the working hours and salary of its employees, for up to 90 days, provided that (i) it preserves the value of the hourly wage, and (ii) celebrates individual written agreement between employer and employee, forwarding to the employee at least 2 calendar days in advance.

The reduction in working hours and wages should be, exclusively, in the percentages of 25%, 50%, or 70%.

If the reductions are applied and communicated within the established deadline, the government will be responsible for paying the rest of the salary with the use of part of the unemployment insurance to which the worker would be entitled.

For cases in which the reduction is 25%, the reduction may be agreed with all employees individually, without the participation of the union.

In other situations, a 50% or 70% reduction can only be agreed upon by individual agreement for employees with a contractual salary of up to three minimum wages (R$3.135,00) or per worker with a higher education level who receives more than double the Social Security ceiling (R$12.202,12), for other cases, salaries between R$3.135,01 to R$12.202,11 The reduction will be conditioned to a collective agreement with the mandatory participation of the union.

The working day and the salary previously paid will be reestablished within 2 calendar days, counting:

1. the end of the state of public calamity;
2. the date established in the individual agreement as the agreed period end and reduction term; or
3. the date of communication from the employer informing the employee of his decision to bring forward the end of the agreed reduction period.

Provisional employment guarantee

The provisional employment guarantee is recognized for the employee who receives the Emergency Job and Income Preservation Benefit, due to the reduction in working hours and wages or the temporary suspension of the employment contract, during the period of the respective agreement.

The unfair dismissal that occurs during the period of provisional guarantee in the intended employment will subject the employer to payment, in addition to the severance installments provided for in the legislation in force, of indemnity calculated according to the following table:

Indemnity * When apply
50%Reduction of working hours and salary equal to or greater than 25% and less than 50%
75% Reduction of working hours and salary equal to or greater than 25% and less than 70%
100% Reduction of working hours and salary over 70% or temporary suspension of the employment contract

(*)Percentage applied to salaries in the period of temporary employment guarantee.




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