Provisional Measure (Medida Provisória - MP) of economic freedom impacts labor relations

Leonardo Bezerra and Rita Araújo

The MP 881/19, also known as MP of Economic Freedom, among other topics, provides for new rules in labor relations, and are highlighted: time clock control, issuance of CTPS and replacement of eSocial.

On August 13 and 14, the House of Representatives approved the MP's basic text and concluded the vote. Afterwards, the discussion continued to the Senate, with amendments to the text (the main one being the exclusion of the topic related to Sunday work), which was registered on September 4th. The process awaits presidential sanction or veto.

Follow the steps of the procedure.

This agenda has been conducted by the government based on the argument of reducing bureaucracy in the economy and increasing legal certainty. In fact, it is very evident the intention to remove obstacles for the entrepreneur, but, moreover, the course of this text reveals the intention to flexibilize labor relations.

The proposed changes follow the trend already observed in the Labor Reform (Law 13.467/2017) to increasingly leave the relationship between employer and employee to the parties' agreement

Check out the main labor rules dealt with by MP 881 maintained in the text after the Senate's evaluation:

Electronic work wallet

As the MP proposed, work booklets will be issued "preferably in electronic media", with paper printing being treated as an exception. The document will have the CPF number as the employee’s unique ID.

The employer will have five business days from the hiring to record in the worker booklet, representing a longer time compared to the current 48 hours.

The information registered in the worker booklet will also have its transition to the digital model, such as for vacation, a very positive measure that will ensure greater dynamism and less documents flow in the human resources departments.

Digitization can be seen as a progress, however, it is unclear, at this moment, when the physical worker booklet would still be issued and how it will be with those already issued in paper.

Time record

Currently, companies with more than ten employees are required to use their employees' time record, with control of both clock-in and clock-out times. With MP 881, this number increases to 20 employees.

A controversial aspect is that the measure allows point control by exception, in case of agreement between employee and employer. Thus, the recording should only take place if the workday is out of the employee's normal hours, for example, in the case of overtime. Acting within the normal range, the formal entry-exit hours control is waived.

The new guideline with the time clock by exception is quite advanced in terms of proving working hours over and above the legal provisions. As this is a permit rather than a requirement, the employer should be cautious if adopting it.

Extinction eSocial

Contrary to the initial expectations, which indicated the extinction of the Digital Tax Bookkeeping System for Social Security and Labor Tax Obligations (eSocial), the MP 881 gives guidelines for flexibility of the obligation, forecasted to replace the current platform to another simplified.

This platform was created for employers to submit workers’ data to the government, but was heavily criticized for excessive demands, fields to fill, inconsistencies and changing deadlines.

Recently, the Steering Committee presented clarification on the simplification, stating that until September 30, 2019, a normative act will be issued to determine on how the information will be sent and then a schedule of replacement or elimination of a series of obligations will be presented.

Continuous attention to the legislation

The effects of this provisional measure for the business, as well as of all legislation of a labor, social security, taxes and tax nature, are always carefully monitored by the Domingues e Pinho Contadores experts.

The DPC consultant’s team is updated on legislative changes in order to provide clients with well-founded and clear guidance, in accordance with the specificities of each operating sector.