Executive Orders numbers 1108 and 1109 were published on March 28, 2022. They generally address the following aspects: (i) alternative measures impacting employment relationships; (ii) emergency program for job and income maintenance, referred to locally as the “BEM Program”, to assist in the combat of the social and economic adverse consequences of the COVID-19 pandemic; (iii) remote work regime; and (iv) payment of new vouchers.
In a very similar manner to the executive orders previously issued, EO #1109/22 also contains provisions regarding remote work, vacation advance, holiday advance, system for the offset of overtime hours and the suspension of severance fund deposits. This new executive order also reproduces some of the provisions in force in the past with respect to the BEM Program, as well as the cases authorizing the suspension of employment or proportional reduction of hours and pay.
Despite containing similar provisions relating to remote work when compared to other executive orders issued in the past, this new EO contains more detailed regulations on the matter.
With respect to collective and individual vacations, which may be granted in advance by the employer, the rule that the time off must be of at least five calendar days remains the same. On this subject matter, the main difference between EO#1109 and the previous EO#927 is that the new rule does not contain an obligation to prioritize those employees who belong to the COVID-19 risk groups for purposes of advancing vacation. The new rule also innovates when it provides that in case of resignation, any advanced vacation may be offset from the employee’s severance. In the same way, in case of collective vacations, the employer shall communicate the local labor department, as well as the union representing the employees. If, however, the collective vacation only impacts certain departments of the company, then no communication to local authorities/union is necessary.
Such executive order also contains provisions relating to the system for the offset of overtime hours, which can be established by means of an individual written agreement or a collective one, with a term of up to 18 months. Differently from the EO issued in 2020, this new regulation expressly stresses that the compensation of the working hours can be performed on weekends and that companies that provide essential services may, during the public calamity, institute the special regime for compensation of overtime hours, independently of the interruption of its activities.
Finally, such EO did not provide for the suspension of health and safety requirements, but did suspend the enforcement of severance fund contributions for companies located in cities impacted by the public calamity recognized by the executive power for at least four competencies. It also contains new provisions relating to BEM Program, Both in case of proportional reduction of working hours and pay, as well as in case of temporary suspension of employment.
Executive Order #1,008, on the other hand, contains rules relating to the payment of meal vouchers, addressed by article 457, paragraph two, of the Labor Code, and amends Law no. 6,321/1976, which created the tax incentive relating to the food voucher deductibility, besides addressing additional employment rules for remote work.
These executive orders shall now be in force for the next 60 days, with the possibility of being extended for another 60-day period. Once they are analyzed by National Congress, they may be converted into law on a permanent basis. Our Employment&Compensation and Social Security teams remain available to discuss about the foregoing matters.