Brazil: Government extends period of suspension of employment contract and salary reduction

Submitted by mmarquez on Wed, 08/12/2020 - 17:15
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senado.leg.br (14.07.2020) The presidential decree increases the maximum deadlines for the two situations (suspension of contract or reduction of wages) to 120 days: For the proportional reduction of working hours and wages, 30 days are increased, going from the current 90 days to 120 days in total; For the adoption of the temporary suspension of the employment contract, there are 60 more days, going from the current 60 to 120 days in total. The decree allows for the fractionation of the contractual suspension in successive or interspersed periods of 10 days or more, subject to the total term of 120 days. The measure also extends the emergency aid of R $ 600 for another month for employees with an intermittent contract signed until the date of publication of law MP 936/2020.

measures summary

The presidential decree increases the maximum deadlines for the two situations (suspension of contract or reduction of wages) to 120 days: For the proportional reduction of working hours and wages, 30 days are increased, going from the current 90 days to 120 days in total; For the adoption of the temporary suspension of the employment contract, there are 60 more days, going from the current 60 to 120 days in total. The decree allows for the fractionation of the contractual suspension in successive or interspersed periods of 10 days or more, subject to the total term of 120 days. The measure also extends the emergency aid of R $ 600 for another month for employees with an intermittent contract signed until the date of publication of law MP 936/2020.

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The decree that extends the suspension of employment contracts for two months and for another month the reduction of wages and workload of employees of private companies was published on Tuesday (14) in the Official Gazette . The text regulates Law 14,020, of 2020 , approved by the National Congress and sanctioned last week and which instituted the Emergency Program for Maintenance of Employment and Income.

Proposed by Provisional Measure 936/2020 , of April 1, the program authorized employers to change wages and working hours during the covid-19 pandemic in Brazil. Initially, the forecast was that employees could have their contracts suspended, with payment of part of unemployment insurance for two months, or have their salaries and working hours reduced by 25%, 50% or 70% for three months, with a salary supplement also granted by the government.

During their passage through Congress, parliamentarians authorized the Executive to extend this reduction for the duration of the pandemic (the state of public calamity in the country ends on December 31). The decree published today details the deadlines.

Maximum deadlines

The presidential decree increases the maximum deadlines for the two situations (suspension of contract or reduction of wages) to 120 days:

  • For the proportional reduction of working hours and wages, 30 days are increased, going from the current 90 days to 120 days in total;
  • For the adoption of the temporary suspension of the employment contract, there are 60 more days, going from the current 60 to 120 days in total. The decree allows for the fractionation of the contractual suspension in successive or interspersed periods of 10 days or more, subject to the total term of 120 days.

The measure also extends the emergency aid of R $ 600 for another month for employees with an intermittent contract signed until the date of publication of MP 936.