Government launches Emergency Program to Maintain Employment to Address Economic Effects of Covid-19

To address the economic effects of the COVID-19 pandemic, the federal government launched the Emergency Program for the Maintenance of Employment and Income. Up to 8.5 million jobs will be preserved, benefiting about 24.5 million workers with signed portfolios. The main objective of the measure is to reduce the social impacts related to the state of public calamity and public health emergency.

The program foresees the granting of the Emergency Benefit for the Preservation of Employment and Income to workers with short time working or suspended contracts, as well as emergency assistance for intermittent workers with formal employment contracts, under the terms of the provisional measure. Funded by the Federal Government, this compensation will be paid regardless of the length of the purchase period, the length of employment or the number of wages received. The total investment is estimated to be R$ 51.2 billion.

According to the estimates of the Secretary of Labor, without the adoption of these measures, it is estimated that 12 million Brazilians could lose their jobs, of which 8.5 million would request unemployment insurance and the other 3.5 million would need to seek welfare benefits to survive.

"Besides the financial cost of not adopting measures now being higher, the social losses are incalculable. It is essential to assist workers and help employers to keep their jobs," explains Bruno Bianco, Special Secretary of Social Security and Labor.

 Emergency Benefit for Preserving Employment and Income

The amount of the emergency benefit will be based on the monthly amount of the unemployment insurance to which the employee would be entitled. For the cases of reduction of working hours and salary, the percentage of the unemployment insurance will be paid equivalent to the percentage of the reduction.

In cases of temporary suspension of the employment contract, the employee will receive 100% of the equivalent amount of unemployment insurance. If the employer maintains 30% of the remuneration, the benefit is 70%. According to the text of the provisional measure, the payment of the benefit will not alter the concession or change in the amount of the unemployment insurance to which the employee is entitled.

The measure provides for exceptions for receiving the emergency benefit. Workers with continued benefits under the General Regime of Social Security (RGPS) or under the Special Social Security Systems or who already receive unemployment insurance are not entitled to it. Pensioners and accident aid holders may already receive the emergency benefit.

Reduction of working hours

For the reduction of the workday with the emergency benefit, there will be the preservation of the amount of the hourly wage paid by the company. The reduction may be made by individual agreement expressed in the percentages of 25% for all workers, and of 50% and 70% for those who receive an amount inferior or equal to R$ 3,135. For those who today already make individual agreements freely for being configured in the CLT (labor legislation) as hyper sufficient - remunerated with more than two RGPS ceilings (R$ 12,202.12) and with higher education, the reduction percentages will be agreed upon between the parties, always with the right to receive the emergency benefit. By means of a collective agreement, the measure may be agreed upon with all employees. The maximum period of reduction is 90 days.

The working hours shall be reestablished when the state of public calamity ceases, the period agreed upon in the individual agreement ends or the employer anticipates the end of the agreed reduction period. The worker shall have a provisional guarantee of employment during the reduction period and after the re-establishment of the working day for a period equivalent to the reduction.

Suspension of employment contract

For cases of suspension of the employment contract in companies with annual gross revenue of less than R$ 4.8 million, the amount of the unemployment insurance will be paid in full to the worker. Companies with annual gross revenue above R$ 4.8 million must maintain the payment of 30% of the compensation of employees, who will also receive the emergency benefit, in the amount of 70% of the benefit.

The suspension may be agreed upon by individual agreement with employees who receive an amount less than or equal to R$ 3,135 or more than two RGPS (R$ 12,202.12) ceilings and who have higher education. In this case, the written proposal must be sent to the employee at least two calendar days in advance. By collective agreement, the measure may be extended to all employees. The maximum suspension period is 60 days.

During the suspension period, the employee may not remain working for the employer, even partially, by means of telework, remote work or distance work. The employee will still have the provisional guarantee in the job during the suspension period and after the reestablishment of the working hours for an equivalent period.

Monthly emergency aid for intermittent workers

This aid will be granted to intermittent workers with formalized employment contracts until the publication of the interim measure. The aid will be in the amount of R$ 600 per month and may be granted for up to 90 days. The estimate is that it will reach up to 143 thousand workers. For cases where the worker has more than one contract as intermittent, he will receive the amount of only one benefit (R$ 600).

Collective agreements

Any collective bargaining agreement or collective bargaining agreement previously concluded may be renegotiated for adequacy of its terms within ten calendar days of the publication of the provisional measure.

For collective bargaining agreements that establish a percentage of reduction of working hours different from the established ranges (25%, 50% and 70%), the emergency benefit will be paid in the following amounts:

>> Reduction of less than 25%: no right to the emergency benefit;

>> Reduction equal to or greater than 25% and less than 50%: emergency benefit in the amount of 25% of unemployment insurance;

>> Reduction equal to or greater than 50% and less than 70%: emergency benefit in the amount of 50% of unemployment insurance;

>> Reduction of 70% or more: emergency benefit in the amount of 70% of unemployment insurance.