Provisional Measure N° 927, of March 22, 2020

By Cleber Alvarenga and Gabriela Resende

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The Federal Government, through Provisional Measure n° 927, edited labor measures in response to the coronavirus pandemic (COVID-19) among other determinations.

It is worth mentioning that in the case of a Provisional Measure, the Federal Government’s determination has immediate implications, however, the Nacional Congress has 120 days for approval and conversion into Law.

Below are described the main points of determination of the Provisional Measure, which aims, among others, to reduce economic effects in the face of the state of public calamity and also to prevent mass layoffs.

The topics covered are as follows:

I. virtual worker (home office);

II. the anticipation of individual vacation;

III. the granting of collective vacations;

IV. the use and anticipation of holidays;

V. the bank of hours;

VI. the suspension of administrative requirements for safety and health at work;

VII. directing the worker to qualification;

VIII. the deferral payment of the Severance Fund (FGTS);

IX. anticipation of vacations in 2020;

X. labor provisions and final provisions.

I – Teleworking or home office

a) the Provisional Measure provides for the performance of the employee’s activities, at the employer’s discretion, via remote work or other types of distance work, regardless of collective agreements or changes in the employment contract, the employer is responsible for determining the return to the regular work style;

b) the measure is also extended to interns and apprentices;

c) notification of such practice must be made to the employee at least 48 hours in advance, the communication must be made in writing or e-mail;

d) there is provision for a written contract between the parties in relation to expenses, infrastructure and repayment to the employee, which must be done within a period of 30 days from the date of amendment of the employment contract;

e) the supply of equipment can be done in lending and infrastructure payments may occur without salary nature;

f) in the absence of supply by lending, the working day will be counted as working time available to the employer, the time spent on communication application being prohibited for this computation of hours, except for occasions provided for in individual or collective agreements;

g) Do not apply to virtual workers, pursuant to the provisions of this Provisional Measure, regulation on call center and telemarketing.

II – Anticipation of individual vacations

a) Vacations may be taken by the employee even before the acquisition period is complete, granted by the employer;

b) No vacation period may be less than 5 days;

c) They must be communicated with a minimum period of 48 hours with the possibility of negotiating the anticipation of future vacation period through individual written agreement;

d) Workers who belong to the COVID-19 risk group have priority to enjoy collective or individual vacation;

e) The exception is due to health professionals or those who perform essential functions, that they can have their vacation suspended through written notice or via electronic means with at least 48 hours in advance;

f) The payment of 1/3 applicable to vacations may be postponed and paid together with 13th salary;

g) The payment of vacation remuneration, granted in advance, may be made until the fifth business day of the month following the beginning of vacation;

h) The employee’s request to convert a third of his vacation into a cash bonus will be subject to the employer’s agreement;

i) In case of dismissal, the unpaid amounts related to vacation must be made together with the severance pay;

III – Collective vacation

a) Collective vacation with formal communication may also be granted to beneficiary employees at least 48 hours in advance;

b) the maximum limit of 2 annual periods and the minimum limit of 10 consecutive days stated in the Brazlian Labor Law (CLT) are not applicable;

c) Previous communications to the Ministry of Economy and to the Unions are not require;

IV – Anticipation of holidays;

a) The Provisional Measure also provides for the anticipation of the rest of non-religious holydays at the municipal, district, state or federal levels upon knowledge and acceptance by the employee;

b) The agreement must be individual, in writing and with description of the holidays to be compensated and notified at least 48 hours in advance;

c) Holidays may be used to offset the balance in the bank of hours;

V – Bank of Hours

a) The compensation system via the bank of hours in favor of employer or employee is authorized;

b) The compensation of hours not worked by the employee may be done within up to 18 months from the end of the state of public calamity;

c) It can be done by extending a maximum of 2 hours daily and performed without the need for a collective or individual agreement;

VI – Suspension of administrative requirements for safety and health at work

a) Occupational, clinical and complementary medical exams are suspended, can be performed within 60 days after the public calamity period, except for dismissal exams;

b) The dismissal exams may be dispensed if the occupational examination has been carried out for less than 180 days;

c) Periodic training and occasional work safety are also suspended during this period, which can be carried out within 90 days from the end of the public calamity period;

d) The training provided can be carried out remotely, leaving the employer to observe the practical content;

e) The CIPA may be maintained and election processes may be suspended during this period.

VII – Difference in FGTS payment

a) The demand for payment by employers of the Guarantee Fund the months of March, April and May/ 2020 to expire in April, May and June/ 2020 specifically is suspended;

b) The measure does not depend on the numbers of employees, taxation regime, legal nature, economic activity or prior membership;

c) The payment of the 3 months may be made in installments (up to 6 times) without incurring a fine and interest, with maturity on the 7th day of each month, the first payment being from July/2020;

d) In case of defaults, they will be subject to the fine and charges due;

e) To guarantee the right to payment in installments, the taxpayer must declare the information through the GFIP until June 20th 2020;

f) Such information will constitute declaration, confession and recognition of credits and debt confession, being a skillful and sufficient instrument to collect FGTS credit;

g) Undeclared FGTS amounts will constitute arrears that may be subject to a fine and interest in accordance with current legislation, in addiction to causing the FGTS certificate of regularity to be blocked;

h) In case of dismissal of the employee, the employer must pay the corresponding amounts, without incurring the fine and interest, if it is made within the legal term established for its realization;

i) You must also make deposits of the amounts for the month of termination and the immediately preceding month, which has not yet been collected, without prejudice to legal arrangements;

j) Any installments falling due will have their maturity date anticipated for the term applicable to the payment;

k) It is suspended the counting of the statute of limitations on debts related to FGTS contributions for a period of 120 days, counted from the date of entry into force of this Provisional Measure, 03/22/2020;

l) The terms of the certificates of regularity issued prior to the date of entry into force of this Provisional Measure will be extended for 90 days;

m) The current installments of debit from the Guarantee Fund that have installments due in March, April and May will not prevent the issuance of a certificate of regularity.

VIII – Other labor provisions

a) Suspended for 180 days, counted from the date of entry into force of this Provisional Measure, the procedural deadlines for the presentation of defense and appeal in the scope of administrative proceedings originating from labor infraction notices and FGTS debit notifications;

b) Cases of contamination by the coronavirus (COVID-19) will not be considered occupational, except upon proof of the causal link;

c) Collective agreements and conventions overdue or falling due, within 180 days, counted from the date of entry into force of this Provisional Measure, may be extended, at the employer’s discretion, for a period of 90 days, after the end of this term;

d) During the period of 180 days, counted from the date of entry into force of this Provisional Measure, the Labor Auditors of the Ministry of Economy will act in a guiding manner, except in specific cases contained in the Provisional Measure;

IX – Anticipation of annual allowance in 2020

For Social Security beneficiaries who during the year received sickness, accident, retirement, death or imprisonment benefits, the annual allowance will be paid in advance:

1. First installment of 50% of the benefit amount due in April plus the benefits of this competence;

2. The second installment will correspond to the difference between the total amount of the annual allowance and the amount of the advance installment and will be paid together with the benefits of the May competency;

3. In the event of a schedule benefit interruption before December 31, 2020, the proportional amount of the annual allowance will be paid to the beneficiary;

4. Whenever the benefit ceases before the scheduled date, for temporary benefits, or before December 31st 2020, for permanent benefits, an account must be found between the amount paid to the beneficiary and the amount actually due.

X – Final Dispositions

The term of validity of the certificate issued jointly by the Special Secretariat of the Federal Revenue of Brazil and by the Attorney General of the National Treasury of the Ministry of Economy, referring to the federal taxes and the active debt of the Union administered by them, will be of 180 days, counted date of issuance of the certificate, extendable, exceptionally, in the event of public calamity, for the period determined in a joint act by public agencies

Cleber Alvarenga is the Compliance Manager and Gabriela Resende is the HR Operations Director at HLB Brasil.

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