News
6/04/2020

New Provisional Measure allows working time and salaries reduction, as well as employment agreements suspension

Additional measures were adopted by the Federal Government aiming at preserving employment and corporate activities continuation.

Besides allowing working time and salaries reduction, as well as employment agreement suspension, Provisional Measure No. 936/2020 established the payment of an emergency benefit if such measures be effectively adopted, which will be supported by the Government.

The Ministry of Economy will provide employers and employees with information regarding the procedures that must be taken by each party in order to pay the referred benefit.

Please find below a summary of the main provisions and requirements established by the PM as well as the risks involved in each of them:

 

MEASURE

REQUIREMENTS

REQUIRES A COLLECTIVE BARGAINING WITH THE LABOR UNION

RISK TO THE COMPANY

Proportional reduction of hours and salaries (25%; 50% or 70%) for a period of up to ninety (90) days.(i) Employers must respect the employees’ hourly-wage value; (ii) Execution of an individual agreement with the employee, who must receive its terms and conditions with at least two (2) days in advance; (iii) Employer must notify the Minister of Economy in up to ten (10) days after entering into an agreement with the employee; (iv) job stability/tenure during the salary reduction period and for equal period after its term; (v) Employers must notify the Labor Union about the agreement entered with the employee in up to ten (10) days after its signature.According to provisional measure n. 936/2020 published today: no, with respect to employees who earn: (i) R$3.135,00 or less per month; or (ii) more than R$12.202,12 and have superior/university degree.

Yes, with respect to employees who earn between R$3.135,00 and R$12.202,12 per month, exception made to the reduction of working time and salary of 25%, which might be established by means of an individual agreement. If the employer decides to establish different percentages for the reduction, a CBA must be entered. In any event, it is worth remembering that the Federal Constitution expressly states that wage reduction is only possible through collective bargaining.

Low, if conducted through collective bargaining agreement. Medium, with no collective bargaining agreement, especially for those employees who earn less than R$3.135,00.
Suspension of the Employment Agreement in up to sixty (60) days, which may be divided in two (2) periods of thirty (30) days each.(i) Employers must respect the employees’ hourly-wage value; (ii) Execution of an individual agreement with the employee, who must receive its terms and conditions with at least two (2) days in advance; (iii) Employer must notify the Minister of Economy in up to ten (10) days after entering into an agreement with the employee; (iv) job stability/tenure during the salary reduction period and for equal period after its term; (v) Employers must notify the Labor Union about the agreement entered with the employee in up to ten (10) days after its signature; (vi) the employee’s work is prohibited, even partially or remotely;  (vii) Companies with annual gross revenue above than R$4.8 million may only suspend the employment agreements by paying a monthly compensatory aid to their employees in the amount of, at least, 30% of the respective salaries during the suspension period.No, with respect to employees who earn: (i) R$3.135,00 or less per month; or (ii) more than R$12.202,12 and have superior/university degree.

Yes, with respect to employees who earn between R$3.135,00 and R$12.202,12 per month.

Low, if conducted through collective bargaining agreement. Medium, with no collective bargaining agreement, especially for those employees who earn less than R$3.135,00.