OBJECTIVE OF THE PROGRAM

    • Preserve employment and income;
    • Guarantee the continuity of work and business activities, given the decrease in economic activities; and
    • Reduce social impacts due to the consequences of the state of public calamity and public health emergency.

2. PROGRAM MEASURES

    • Payment of the Emergency Employment and Income Preservation Benefit;
    • Proportional reduction of working hours and wages; and
    • Temporary suspension of the employment contract.

3. IMPLEMENTATION OF THE MEASURES

    • The Ministry of Economy will be in charge of coordinating, executing, monitoring, and evaluating the Emergency Employment and Income Maintenance Program and editing complementary rules necessary for its execution.
    • The Ministry of Economy will regulate the form of transmission of information and communications by the employer about the measures adopted by the company, based on the Emergency Program and the way of granting and paying the Emergency Benefit.

4. EMERGENTIAL BENEFIT OF PRESERVING EMPLOYMENT AND INCOME – ARTICLE 5 of MP nº 936/20

The Emergency Employment and Income Preservation Benefit, paid for with Federal resources, will be paid in the following cases:

(a) Proportional reduction of working hours and wages;

(b) Temporary suspension of the employment contract.

The Emergency Employment and Income Preservation Benefit will be provided monthly and due from the date of commencement of the reduction in working hours and wages or temporary suspension of the employment contract, subject to the following conditions:

(a) The employer shall inform the Ministry of Economy of the reduction in working hours and wages or the temporary suspension of the employment contract, within ten days, counting from the date of conclusion of the  negotiation;

(b) The payment of the first installment will be made within 30 days, counting from the date of completion of the negotiation, provided that the company informs the negotiation within the ten days mentioned in item (a) above.

(c) The first installment of the Emergency Benefit will be paid within 30 days, counting from the date on which the information was provided;

(d) If the employer does not provide the information within ten days, it will suffer the following penalties:

(i) It will be necessary to pay, even with the reduction of the working hours or suspension of the contract, the full amount of the remuneration perceived by the employee before the implementation of the reduction of the workday and the salary or the suspension of the employment agreement, including social charges; and

(ii) The obligation to pay the remuneration and expenses in full will only cease when the employer provides the reduction or suspension information to the Ministry of Economy.

It is up to the employer to provide the correct information to the Ministry of Economy, provided that Emergency Benefits paid improperly or in excess will be registered in the Federal Union’s existing debt, in which case the Law of Tax Foreclosures will be applied for judicial execution.

The receipt of the Emergency Benefit does not prevent the concession or change the amount of unemployment insurance to which the employee may be entitled in the future, due to eventual dismissal, subject to the requirements of Law No. 7.998/90 (Unemployment Insurance Law).

5. EMERGENCY EMPLOYMENT AND INCOME BENEFIT VALUE

The amount of the Emergency Benefit will be based on the monthly unemployment insurance amount to which the employee would be entitled, under the terms of the Unemployment Insurance Law, subject to the criteria and requirements provided for in articles 7 and 8 of Provisional Measure 936 / 20.

VALUES OF UNEMPLOYMENT INSURANCE IN 2020:

Average Salary Ranges Installment Value
Up to R $ 1,599.61 The average salary is multiplied by 0.80 (80%)
From R $ 1,599.62 to R $ 2,666.29 What exceeds R$ 1,599.61 multiplies by 0.5 (50%) and adds up to R$ 1,279.69
Above R $ 2,666.29 The installment will be R$ 1,813.03 invariably

 

The Emergency Benefit will be paid to the employee independently:

(a) the fulfillment of any acquisition period;

(b) the duration of the employment agreement; and

(c) the number of wages received.

The Emergency Benefit will not be paid to the employee re:

(a) receiving any benefits from the General Social Security Regime, except for the pension for death or accident allowance;

(b) receiving unemployment insurance, in any of its modalities; and

(c) receiving a professional qualification scholarship.

The employee with an intermittent employment agreement formalized until the date of publication of Provisional Measure No. 936/20 will be entitled to the Emergency Benefit in the amount of R $ 600.00 (six hundred reais), for 3 (three) months. The monthly benefit will be due from the publication of Provisional Measure No. 936/20 and will be paid within 30 (thirty) days.

An employee who has more than one intermittent employment agreement will be entitled to only one Emergency Benefit of R $ 600.00 (six hundred reais).

The employee with more than one formal employment relationship may receive the Emergency Benefit for each employment relationship with reduced working hours and salary or suspension of the employment agreement.

6. PROPORTIONAL REDUCTION IN WORKING DAYS AND SALARY

According to Article 7 of Provisional Measure No. 936/20, during the state of public calamity, the employer may agree to a proportional reduction in working hours and wages, subject to the following conditions:

(a) preservation of hourly wages;

(b) the maximum term of 90 days;

(c) agreed by an individual or collective written agreement;

(d) the individual agreement will be written, and the employer’s proposal must be sent to the employee at least two calendar days before the start of the application of the reduction; and

(e) guarantee of employment during the period of the reduction and, after the re-establishment, for a period equivalent to such reduction.

Employees who enter into working hours and wage reduction agreements with their employers or who are covered by a collective workforce and wage reduction agreement, signed between the employer and the local union, will be entitled to the emergency benefit.

The reduction in working hours and wages may be applied exclusively in the following percentages: 25%, 50%, or 70%.

The re-establishment of the working day and the salary previously paid will be reestablished in 2 calendar days, counted:

(a) the cessation of the state of public calamity; or

(b) from the date established in the individual agreement as to the end of the period for the reduction of hours and wages.

Provisional Measure No. 936/20 establishes that the reduction in working hours and wages may be applied for a maximum period of 90 days during the period that the state of public calamity lasts. The state of public calamity was decreed by Legislative Decree No. 6/20, valid until 12.31.2020. The employer will be able to decide the best time to reduce the workday and the salary, since the 90 days provided for in the Provisional Measure elapse within the period of the state of public calamity.

The employer will be able to anticipate the end of the agreed reduction period and will have to inform the employee about his decision two calendar days in advance.

Provisional Measure No. 936/20 establishes the cases in which the reduction in working hours and wages may be implemented through an individual agreement and those cases in which collective bargaining is required. The table below summarizes the rules of the Provisional Measure regarding the reduction of hours and wages allowed and the requirements for formalizing an individual or collective bargaining.

Reduction Emergency Benefit Amount Individual Agreement Collective Bargaining
25% 25% of unemployment insurance All employees All employees
50% 50% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees
70% 70% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees

 

In short:

(a) 25% reduction: individual agreement with any employee;

(b) Reduction of 50% or 70%: individual agreement with employees who receive up to 3 minimum wages or more than R$ 12,202.12;

(c) Reduction of 50% or 70%: collective bargaining for employees who receive more than three minimum wages and less than R$ 12,202.12 or who earn more than R$ 12,202.12 and do not have a higher education degree.

7. TEMPORARY SUSPENSION OF THE WORK CONTRACT

During the state of public calamity, the employer may agree to temporarily suspend the employment contract with its employees, for a maximum period of 60 days, which may be divided into up to two periods of 30 days.

The temporary suspension of the employment contract can be agreed upon by individual written agreement between employer and employee. It must be forwarded to the employee at least two days before the suspension begins.

During the period of temporary suspension, the employee will be entitled to all benefits granted by the employer. Provisional Measure No. 926/20 does not exclude any benefit, be it legal, conventional, or given freely by the employer.

No benefit is strictly excluded, not even the transportation voucher. However, this is a benefit for which the employer anticipates the amount spent on transportation so that the worker moves from his residence to the workplace and vice versa, and its concession would not be justified during the contract suspension period.

During the period of temporary suspension of the employment contract, the employer will not contribute to the General Social Security System, and the employee may pay social security contributions as an optional insured.

The employment contract will be reestablished within two calendar days, counting:

(a) The cessation of the state of public calamity, as defined by Legislative Decree No. 6/20, with a term of validity up to 12.31.2020; or

(b) the date established in the individual agreement as to the end of the suspension period (maximum of 60 days); or yet,

(c) The date of the employer’s communication, informing the employee of his decision to bring the agreed suspension period to an end.

If, during the contract suspension period, the employee maintains work activities, even if partially, through teleworking, remote or remote work, the suspension will be uncharacterized, and the employer will be subject to:

(a) the immediate payment of remuneration and social charges for the entire period;

(b) the penalties provided for in the legislation in force, for non-compliance with the rules provided for in the Provisional Measure; and

(c) sanctions provided for in collective bargaining or collective convention.

The company that earned, in the calendar year of 2019, gross revenue exceeding R$ 4,800,000.00 (four million and eight hundred thousand reais) can only suspend the employment contract of its employees by paying monthly compensatory aid equivalent to 30% of the employee’s salary, during the period of temporary suspension from work.

The compensatory aid will comply with the following criteria:

(a) It should be provided for in the individual or collective bargaining;

(b) It will have an indemnity nature;

(c) It will not be included in the calculation basis of the income tax withheld at source or the annual income tax adjustment statement for the employer’s income;

(d) It will not be included in the calculation base of the social security contribution, and other taxes levied on the payroll;

(e) It will not be included in the calculation base of the amount due to the FGTS; and

(f) May be excluded from net income to determine corporate income tax and social contribution on corporate net income taxed by taxable income.

 

Company’s Annual Gross Revenue Monthly Compensatory Aid Paid by the Employer Emergency Benefit Amount Individual Agreement Collective Bargaining
Up to R $ 4.8 million Not mandatory 100% unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees
More than R $ 4.8 million Mandatory 30% of the employee’s salary 70% of unemployment insurance Employees receiving up to three minimum wages (R $ 3,135) or more than two ceilings from the RGPS (R $ 12,202.12) All employees

 

8. COMPENSATORY AID – REDUCTION IN DAY AND WAGE AND SUSPENSION OF THE WORK CONTRACT – ARTICLE 9 OF PROVISIONAL MEASURE No. 936/20

The Emergency Benefit may be accumulated with the payment of monthly compensatory aid by the employer as a result of the reduction in working hours and wages or the temporary suspension of the employment contract.

The compensatory aid for the temporary suspension is only payable by companies with annual gross revenue above R$ 4,800,000.00 (four million and eight hundred thousand reais), in a minimum percentage of 30% of the salary. Companies with annual gross income below this ceiling or any company that signs working hours and wage reduction agreement may also grant monthly compensatory aid. In such cases, the monthly compensatory support must observe the following rules:

(a) Have a value defined in the individual agreement agreed or in collective bargaining;

(b) It will have an indemnity nature;

(c) It will not be included in the calculation base of the social security contribution, and other taxes levied on the payroll;

(d) It will not be included in the basis for calculating the amount due to the FGTS;

(e) May be excluded from net income to determine corporate income tax and Social Contribution on Net Income of corporate entities taxed by taxable income; and

(f) In the case of reduced working hours and wages, compensatory aid will not be included in the salary due by the employer.

9. PROVISIONAL GUARANTEE IN EMPLOYMENT

Article 10 of Provisional Measure No. 936/20 recognizes the provisional guarantee in employment for the employee who receives Emergency Benefit as a result of the reduction in working hours and salary or the temporary suspension of the employment contract, in the following terms:

(a) During the period that the workload and wage reduction lasts;

(b) During the period of temporary suspension of the employment contract;

(c) After the re-establishment of the working day and the salary or the end of the temporary suspension of the agreement, for a period equivalent to that agreed for the reduction or suspension (for example, 60 days of suspension of employment agreement – 120 days job guarantee).

If the employee is dismissed without cause during the period of provisional guarantee in employment, in addition to the severance payments provided for in the legislation in force, the following indemnities will be due:

(a) 50% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the event of a reduction in the working day and a salary equal to or greater than 25% and less than 50%;

(b) 75% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, there is a hypothesis of a reduction in working hours and a salary equal to or greater than 50% and less than 70%;

(c) 100% of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the hypotheses of reduction of the working day and salary in a percentage higher than 70% or temporary suspension of the employment contract.

Employees who resign or are dismissed for just cause are not entitled to the payment of the indemnities listed in item 9.2.

10. COLLECTIVE BARGAINING AND COLLECTIVE CONVENTION

Measures to reduce hours and wages or suspend the employment contract referred to in Provisional Measure No. 936/20 may be entered into through collective bargaining.

The collective bargaining agreement or collective convention may establish percentages of reduced working hours and wages different from that established in Provisional Measure No. 936/20. Depending on the reduction percentage adjusted in a collective rule, the emergency benefit will not be due or will be reduced, in the following terms:

(a) No perception of the emergency benefit for working hours and wages lower than 25%;

(b) 25% on the calculation basis provided for in article 6, for a reduction in work hours and salaries equal to or greater than 25% and less than 50%;

(c) 50% on the calculation basis provided for in Article 6, for a reduction in working hours and wages equal to or greater than 50% and less than 70%; and

(d) 70% on the calculation basis provided for in Article 6, for the reduction of hours and wages above 70%.

Collective labor agreements or agreements previously entered into can be renegotiated to adapt their terms, within ten calendar days, counted from the date of publication of Provisional Measure No. 936/20.

Individual agreements for the reduction of working hours and wages or temporary suspension of the contract must be communicated by the employers to the respective local union of the employee category, within up to 10 calendar days, counted from the date of its execution.

11. OTHER PROVISIONS

(a) The reduction in working hours and wages or the suspension of the employment contract cannot affect the exercise and functioning of public services and essential activities provided for in Law No. 7,783 / 89 and Law No. 13,979 / 20.

(b) Irregularities found by labor inspection will subject violators to legal fines.

(c) The provisions of Provisional Measure No. 936/20 apply to apprentice and part-time employment contracts.

(d) During the state of public calamity, the courses or professional qualification program referred to in article 476-A of the CLT may be offered by the employer exclusively in the face-to-face modality. It will last no less than one month and not more than three months.

(e) Electronic means may be used to meet the formal requirements provided for in Title VI of the CLT – collective bargaining – including for calling, deliberating, deciding, formalizing and advertising a convention or collective bargaining agreement, and the deadlines provided for in that Title are halved.