Meal allowance: understand the new rules in managing this benefit

Provisional Measure No 1,108 has brought changes that need to be implemented by employers and companies that provide meal allowances for workers

The Provisional Measure No 1,108 was published in the Federal Official Gazette on March 28, and quickly sparked discussions since the act outlines the rules for remote work. But the measure also raised another topic that deserves attention from companies: the payment of meal allowances.

The recently published act has changed the rules for payment of meal allowances to ensure that those resources are being effectively used in the purchase of foodstuffs. It also made illegal to give discounts when hiring companies that provide such benefit.

The issue was raised because the benefit, which grants a favorable tax treatment for companies subject to the ‘actual profits’ method (‘Lucro Real’, which is based on taxable income), has been widely used for purposes other than exclusively the acquisition of foodstuffs, which was the program’s original intent.

he recent years have seen a rise in companies that provide unrelated services – such as cable TV subscriptions, for instance – under the label of “food allowance expenses”.

Another practice that has become commonplace is the hiring of food ticket suppliers at a discount. Nowadays, some employers bargain a lower cost for this hiring process.

However, the cost of that deduction is then transferred to restaurants and supermarkets through higher tariffs. This situation eventually takes a toll on workers, who end up paying more for their food.

Fines and penalties for non-compliance

Companies that do not comply with the rules will warrant either a fine or accreditation loss by the government.

The legal text provides for the application of a fine ranging from BRL 5,000.00 to BRL 50,000.00, which will be doubled in case of recidivism or obstruction of regulatory inspections.

Failure to comply may also result in the deregistration of the beneficiary legal entity or of companies linked to worker’s food programs registered at the Ministry of Labor and Social Security.

Establishments that sell products unrelated to the workers’ nourishment and companies that have accredited those establishments are also subject to the imposition of said fine.

Effective date of the MP No 1,108/2022

It should be noted that if the MP 1.108/2022 is not converted into law within 120 days from the date of its publication, it will expire. In any case, a safe bet for companies is to implement the provisions set therein as soon as possible.

Labor management compliance

DPC has a labor and social security team that brings employers up to par with the best practices for workforce management, ensuring compliance with current rules and regulations. You can count on our support: dpc@dpc.com.br.