New Emergency Program for Maintaining Employment and Income through Provisional Measure No. 1.045/2021

New Emergency Program

Provisional Measure No. 1,045/2021, published on 4/27/2021, institutes the New Emergency Program for Maintaining Employment and Income and provides complementary labor measures to deal with the state of public calamity due to Covid-19. The PM 1.045 basically brings back the Program of the PM 936/2020, with minor adjustments.

PM 1,045 allows the reduction in the workload and wages of employees proportionately, and these employees will then be entitled to receive the Emergency Employment and Income Benefit. The reductions in wages and hours may be 25%, 50% or 70%, as in PM 936/2020. Therefore, it will be necessary attend to some conditions:

•Maintenance of the value of the employees’ hourly wage;

•Maximum reduction period of 120 days, as long as it is within the term(s) of the MP – until 08/24/2021;

•Formalization of the conditions through an individual agreement between employee and employer – in some cases a collective labor agreement is necessary;

•Provisional employment warranty during the reduction period and after its closure for a period equivalent to that of the reduction.

PM 1,045 also provides the possibility of suspension of the employee’s employment agreement. In this case, the employees will be entitled to receive the Emergency Employment and Income Benefit, provided that the following conditions are attended:

•Maximum suspension period of 120 days, as long as it is within the term(s) of the MP – until 08/24/2021;

•Formalization of the conditions through an individual agreement between employee and employer- in some cases a collective labor agreement is necessary;

• The benefits paid by the employer to the employee must be maintained during the suspension of the employment agreement;

• There shall be no way that the employee provides services to the employer during the suspension of the agreement, under the penalty of invalidation of the suspension;

• Provisional employment warranty during the period of suspension and after its closure for a period equivalent to that of the suspension.

It should be noted that the company that has accomplished in the calendar-year of 2019 a revenue greater than R$ 4,800,000.00, can only suspend the employment contract of its employees upon the payment of a monthly compensatory aid in the amount of 30% of the value of the employee’s salary, during the period of the temporary suspension of work agreed on.

It is important to note that the PM allows the contract to be reduced and suspended for successive periods of time, as long as the periods altogether do not exceed 120 days. However, it differs in relation to PM 936/2020, as to the absence of express provision on the fractioning of the periods of reduction or suspension of the contract.

For more information about PM 1.045/2021 or assistance with the implementation of the New Employment and Income Maintenance Program in your company, please contact our Labor Team.

Laura Lanser Bloemer

GUARNERA ADVOGADOS