Brazilian Government publishes Provisional Measure providing labor measures against coronavirus
On March 22, 2020, the Brazilian Federal Government published the Provisional Measure No. 927 (“PM No. 927/2020”), setting forth labor measures to face the coronavirus pandemic, aiming to preserve employment and workers’ income.
PM No. 927/2020 is already in force, but it must be approved by the National Congress within 120 days in order to maintain its validity.
PM No. 927/2020 is applied during the state of public calamity already recognized by the National Congress and, for labor purposes, constitutes a hypothesis of force majeure, under the terms of Article 501 of the CLT (Consolidation of Labor Laws – the Brazilian Labor Law Code).
According to the PM’s text, the employer and the employee may enter into individual written agreement to guarantee the permanence of the employment relationship, which will overlap other normative, legal and business agreements previously signed.
Among the measures that may be adopted by employers to try to reduce the economic effects of the coronavirus, are:
(ii) advanced individual vacations;
(iii) granting collective vacations;
(iv) use and advancement of holidays;
(v) working hours bank (“banco de horas”), a working hours record data base for future use;
(vi) the suspension of administrative requirements for safety and health at work; and
(vii) the postponement of FGTS (Fundo de Garantia por Tempo de Serviço) payment.
Regarding teleworking, the employer may adopt it regardless of the existence of individual or collective agreement and regardless of prior registration of changes to the individual employment contract. Teleworking regime adoption’s notice must be sent to the employee (including interns and apprentices) at least 48 hours in advance, in writing or by electronic means.
PM No. 927/2020 defines teleworking, remote work or distance work as rendering services predominant or totally outside the employer’s premises, using information and communication technologies that, by their nature, do not constitute external work.
The conditions relating to the responsibility for the acquisition, maintenance or supply of technological equipment and infrastructure for teleworking and the reimbursement of expenses borne by the employee shall be provided in a written agreement, already signed or to be signed within 30 days, counted as of the date of work regime change.
If the worker does not have the necessary equipment and infrastructure to render its services via teleworking, the following measures may be adopted:
(i) the employer may supply the equipment on a lending basis and pay for infrastructure services, which will not be characterized as funds of salary nature; or
(ii) if the lending regime is not possible, the normal working day period will be computed as working time available to the employer.
Call center and telemarketing labor regulations are not applicable to workers rendering its services under teleworking regime.
Finally, PM No. 927/2020 sets forth that the time spent using apps and communication programs outside regular working hours will not constitute time available to the employer, unless there is a provision in an individual or collective agreement.
Advanced Individual and Collective Vacations
In order to grant advanced individual vacations, the employer must inform the employee in writing or electronically at least 48 hours in advance and provide the vacation period, which cannot be less than 5 days. In addition, vacations may be granted under this special regime even if the employee’s vacation vesting period has not elapsed yet.
The PM 927/2020 provides that workers who are in the coronavirus risk group (pregnant women, the elderly, people with other chronic diseases) shall have priority on vacations, whether individual or collective.
The employer can also choose to pay the 1/3 additional leave remuneration until December 20, 2020 (date of the Christmas bonus). Likewise, the payment of the leave remuneration granted due to the state of public calamity may be made until the 5th business day of the month following the beginning of the leave period. The provision set forth by art. 145 of the CLT is not applicable to such hypothesis.
In addition, the employer may suspend, during the state of public calamity, the vacation or unpaid leave of health professionals or those who perform essential jobs to combat the pandemic, what must be communicated to the worker in writing or by electronic means, preferably 48 hours in advance.
If the worker is dismissed, the employer shall pay, jointly with severance payments, the amounts owed regarding vacation.
Finally, for the granting of collective vacations, the employer must inform the benefited employees at least 48 hours in advance, with prior notification to the local Ministry of Economy body and communication to unions representing the professional category being waived.
Use and Advancement of Holidays
Employees will be able to have advanced federal, state, district and municipal non-religious holidays, which must be notified in writing or electronically to the benefited workers with at least 48 hours in advance. Such notice shall also indicate which holidays will be used. Holidays can also be used to make up the balance in the working hours bank (“banco de horas”).
The enjoyment of religious holidays will depend on the employee’s approval, which must be done by means of an individual written agreement.
Working Hours Bank (“Banco de Horas”)
During the state of public calamity, the interruption of activities by the employer and the establishment of a working hours bank in favor of the employer or the employee are authorized. Such working hours bank shall be provided by collective or individual formal agreement and must be used for compensation within up to 18 months counted as of the closing-date of the state of public calamity.
The compensation of time for recovery of the interrupted period may be made by extending the working hours by up to 2 hours. The total working hours may not exceed 10 hours per day, and the compensation of the hours’ balance may be determined by the employer regardless of collective convention or individual or collective agreement.
Suspension of Administrative Requirements for Safety and Health at Work
During the state of public calamity, the obligation to carry out occupational, clinical and complementary medical examinations is suspended, except for dismissal medical examinations, which must be carried out within 60 days after the end of the state of public calamity. This hypothesis does not apply if the doctor considers that the postponement of the examination implies a risk to the worker’s health.
The dismissal medical examination may also be waived if the most recent medical examination was carried out less than 180 days ago.
The obligation to conduct periodic and occasional training for current employees is also suspended. Those trainings must be carried out within 90 days, counted as of the end of the state of public calamity and may be carried out remotely, provided that the employer observe the practical contents.
Postponement of FGTS Payment
FGTS payment by employers regarding the months of March, April and May 2020 is suspended, regardless of: (i) the number of employees; (ii) the taxation regime; (iii) the legal nature; (iv) the business sector; and (v) prior adherence.
The payment of such contributions may be made in installments, without monetary adjustment, fine and charges. Those contributions must be paid in up to 6 monthly installments, starting in July 2020.
In order to be able to use the benefit, the employer will be obliged to declare, up to June 20, 2020, the information provided by law, which will constitute recognition of the credits arising from them and will characterize acknowledgement of indebtedness. In addition, undeclared amounts will be considered in arrears and will require full payment of fine and charges due.
In the event of termination of the employment contract, the suspension of the FGTS payment will be finished and the employer shall be obliged to collect the corresponding amounts, without fine and charges due, if the payment is made within the legal term established for its accomplishment and if there is a deposit of the amounts provided for in art. 18 of Law No. 8,036, of 1990.
The statute of limitation for debts related to FGTS contributions is also suspended for a period of 120 days, counted as of the date of effectiveness of PM No. 927/2020.
During the state of public calamity, health establishments will be allowed, by individual written agreement, even for the cases of unhealthy activities and for the twelve-hour working hours for thirty-six hours of rest to: (i) extend the workday; and (ii) adopt overtime schedules between the thirteenth and the twenty-fourth hour of the interjected interval, without any administrative penalty provided that the paid weekly rest is guaranteed.
Overtime hours may be compensated within 18 months, counted as of the closing-date of the state of public calamity, through working hour bank or paid as overtime.
Also, during the 180-day period, counted as of the date of effectiveness of PM No. 927/2020, the procedural terms for the presentation of defense and appeal in the context of administrative proceedings originating from labor infraction notices and notifications of debts regarding FGTS are suspended.
PM No. 927/2020 also applies to employment relationships governed by the law on temporary work, rural work and, where applicable, the domestic work law (such as working hours, working hours bank and holidays).
In addition, labor measures adopted by employers that do not contravene the provisions of PM No. 927/2020 and adopted within 30 days prior to the date of its effectiveness (March 22, 2020) will be considered valid.
It is worth mentioning that the text of PM No. 927/2020 provided in its art. 18 the possibility of suspension of the employment contract for 4 months, so that the employee could take professional qualification courses, during which time he/she would not receive any salary. However, after receiving strong criticism from various sectors and entities, the Government stepped back and published Provisional Measure No. 928 in an extra edition of the Official Gazette, revoking this article.
It was also expected that PM No. 927/2020 would bring the possibility of reducing the working day, with the consequent reduction in wages by 50%, but this measure ended up not entering the legal text. The Government announced that a new Provisional Measure will be published later this week, bringing other proposals to mitigate the effects of the coronavirus on labor relations, so that the expectation is that the proportional reduction of working hours and wages will be provided for in this new act.
 Art. 501. “Force Majeure” shall mean any unavoidable event, outside the control of the employer, to the occurrence of which he did not contribute, either directly or indirectly.
 Art. 145. Leave remuneration and, where appropriate, the cash in lieu of leave referred to in article 143 shall be paid not less than two days before the beginning of the leave.
 The maximum annual leave limit and the minimal consecutive days period provided by CLT (2 annual leaves made of at least 10 consecutive days) will not be applicable.
 Law No. 8.212/1991:
Art. 32. The company is also obliged to:
IV – declare to the Public Finance Department and to the Curator Council of the Unemployment Compensation Fund for Period of Service – FGTS in the form, term and conditions provided by those agencies, data regarding tax triggering event, calculation basis, amounts of owed social security contribution and other relevant information to INSS or to FGTS Curator Council.
 Art. 18. In the event of termination of the employment contract by the employee, he/she will be obliged to deposit on the blocked FGTS account the amounts related to the termination month and the immediately preceding month which have not yet been paid, without prejudice to other legal charges.