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Conversion of Executive Order 936 into Law

07/07/2020

E-Alert::: Trabalhista | Conversão em Lei da MP936

President Bolsonaro just approved Law 14,020/00, of July 6, 2020, which institutes the emergency program for maintenance of jobs and income, what was previously addressed through the Executive Order 936.
 
As the current main incentive to the preservation of jobs and income in Brazil, this new law changed important aspects to implement the suspension of employment agreements, as well as the reduction of working hours and corresponding reduction in pay.
 
Employers may implement such measures through individual or collective agreements with respect to the following employees:
 
(i) those with salary equal to or lower than R$2,090.00, in case the employer had a gross revenue  higher than R$4,800,000.00 in calendar year 2019;
 
(ii) those with salary equal to or lower than R$3,135.00, in case the employer had a gross revenue equal or lower than R$4,800,000.00 in calendar year 2019; or
 
(iii) those with a college degree and a monthly salary equal or higher than R$12,202.12 (amount equivalent to two times the maximum benefit provided by Social Security).
 
In case the employees do not fit the conditions above, the implementation of the potential measures shall be negotiated through a collective agreement, except in case of (1) a reduction in salary of 25% or (2) if the sum of the financial benefit provided by the government and any additional allowance/salary does not result in a decrease of the total amount that used to be received by the employee.
 
The reduction of hours and pay can be implemented for up to 90 days and the suspension of employment for up to 60 days, which can be divided into two periods of 30 days. Law 14,020/00 provides for the possibility of extension of the measures implemented, but the terms of this extension still need to be disciplined by a separate act of the Executive Power.
 
Many provisions contained in the Executive Order 936 were maintained, such as the obligation to communicate the Ministry of Economy as well as the Labor Union within a term of 10 days after the execution of the agreement, under the penalty of the employer having to pay for such compensation. The job security and additional indemnity  provided to those impacted by the measures were also maintained, as well as the possibility of providing an additional compensation payment during this exceptional period.
 
Our employment team remains available to further discuss about the above and discuss about the impacts of this new law.
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