New rules for Employment-Insurance Program

The conversion of Provisional Measure No. 761/2016 into the Law No. 13,456/2017 on Jun-27-2017, through publication at the Official Gazette, has amended the old Employment Protection Program (EPP), established by Law No. 13,189, of November 19, 2015, the new name for Employment-Insurance Program (Programa Seguro-Emprego - “PSE”) and extending its length.

The main points from the whole program, comprising the recent changes are as follows:

Program Goals

PSE is aims to assist employees in maintaining employment, as follows:

a) allow maintaining employment in economic activity downturn;

b) promoting the economic and financial recovery of companies;

c) support aggregate demand during in adversities, to facilitate the economy recovery;

d) stimulate labor productivity by increasing the legth of employment relationship; and

e) encourage collective bargaining and improve employment relationsips.

Joining

Companies from all areas in economic and financial difficulties signing specific working hours reduction and salary collective agreement may join the PSE. They should apply for at the Ministry of Labor until Dec-31-2017, observing to the twenty-four-months maximum period of stay, as established Regulation, respecting the Program termination date (Dec-31-2018).

Priority

Priority for joining:

a) Micro and small companies;

b) Companies observing the share of disabled people;

c) Micro and small companies that have reintegration program former prisoners.

Exclusion

Acts that may result in exclusion from the program:

a) Breach of definitions in the collective bargaining agreement on temporary reduction of working hours or any other provision in this Act or rules;

b) Fraud within the PSE; or

c) Conviction in court final judgment or administrative assessment after the final decision in the administrative process for work practical similar to slavery, child, or degrading labor.

Important: Failure to comply with the collective agreement or PSE rules requires the company to repay the FAT funds received, duly corrected, in addition to payment of one hundred percent (100%) of this amount, corresponding to an administrative penalty, calculated twice in the case fraud.