April 15, 20 - 12:02 pm - LABS

Brazil already has more than 1.1 million agreements signed to suspend employment contracts or reduce working hours

According to the newspaper O Estado de S.Paulo, 1,189,378 agreements between companies and employees to reduce work hours and wages or suspend contracts during the crisis caused by the new coronavirus pandemic were registered until Tuesday. These workers will receive an emergency benefit equivalent to a part of the unemployment insurance to which they would be entitled if they were dismissed.

Special Secretary for Social Security and Labor, Rogério Marinho
Special Secretary for Social Security and Labor, Rogério Marinho. Photo: Valter Campanato / Agência Brasil

According to the Special Secretary for Social Security and Labor, Rogério Marinho, these numbers will update daily and published on an open web page from this Wednesday.

The possibility of temporarily suspending employment contracts for up to 60 days came into force through Provisional Measure (MP) 936/2020, published two weeks ago. According to the measure’s text, a reduction in working hours is also allowed, in percentages that can vary from 25% to 70%, with a reduction in wages. For cases of reduced working hours and wages, the government provides an emergency benefit with the unemployment insurance percentage equivalent to the wage reduction percentage.

The president of Brazil’s House of Representatives, Rodrigo Maia, said that he intends put this PM on vote next week. Like any provisional measure in the country, the document must pass through Congress for continue to be valid. It is likely that deputies will want to extend the measure beyond the two months originally planned by the Brazilian Executive.