This newsletter provides clarification on the provisions of Decree 10.422/20 that regulated Law 14.020/20 (former MP 936/20), establishing deadlines for working hours reduction agreements and temporary contractual suspension.

I. PROPORTIONAL REDUCTION OF DAY AND SALARY

Article 7 of Law 14.020/2020 read as follows:

During the state of public calamity referred to in art. 1, the employer may agree to a proportional reduction in the working day and salary of its employees, for up to ninety days (...)

Decree 10,422/20, in turn, extended the period by 30 days, and the proportional reduction can then be up to 120 days in total:

The maximum period for entering into an agreement for the proportional reduction of the working day and salary referred to in the caput of art. 7 of Law No. 14.020, of 2020, is increased by thirty days, in order to complete the total of one hundred and twenty days.

II. TEMPORARY SUSPENSION OF THE EMPLOYMENT CONTRACT

The maximum period for the temporary suspension of the employment contract was 60 days, according to the text of article 8 of Law 14.020/20, however, with Decree 10.422/20 there was an increase of 60 days, making a total of 120 days to keep the employee's contract suspended, pursuant to article 3:

The maximum period for entering into an agreement for the temporary suspension of the employment contract referred to in the caput of art. 8 of Law No. 14.020, of 2020, is increased by sixty days, in order to complete the total of one hundred and twenty days.

The Decree also innovated in the original text, now allowing the suspension period to be split, that is, the employee can have the contract suspended for continuous periods or shared multiple times, alternating the return to activities with periods of suspension, provided that the sum of all periods of suspension does not exceed the period of 120 days.

Also, each suspension period (in case of splitting) cannot be less than 10 days.

The possibility remains that the suspension can be applied in some sectors or to the entire company, by individual, collective or collective agreement, and, in the case of an individual agreement, it must be communicated to the employee 02 calendar days in advance.

III. SUM OF SUSPENSION PERIODS AND WORKDAY REDUCTION IN FORCE

The increase (of 30 or 60 days) in the period brought by the Decree must be added to the employment contracts that are already under suspension or reduction of working hours, respecting the maximum period of 120 days.

It is important to emphasize that the Federal Government explains that, despite the immediate effects of the Decree, the availability of amounts for the granting of the Emergency Benefit (BEM), is conditioned to the budget forecast, that is, if before the end of the period of public calamity there is no there is more money, payments to workers will be terminated.

IV. REMUNERATION LIMITS FOR AGREEMENT

It is important to note that Law 14.022/20, which regulated Provisional Measure 936/20, imposes certain conditions for the execution of agreements to suspend the contract or reduce working hours.

The measures will be implemented through individual written agreement or collective bargaining to employees with a salary equal to or less than R$ 2,090.00, if the company earned in 2019 a gross income greater than R$ 4,800,000.00.

Likewise, to employees with a salary equal to or less than R$ 3,135.00, if the company earned in 2019, gross revenue equal to or less than R$ 4,800,000.00.

The possibility of reaching an agreement extends to employees with a higher education degree and who receive a monthly salary equal to or greater than twice the maximum benefit limit of the General Social Security System.

The individual written agreement may also be carried out in the following cases: from 25%;

I – proportional reduction of working hours and wages.

II – proportional reduction of working hours and salary or temporary suspension of the employment contract upon agreement does not result in a decrease in the total amount received monthly by the employee, including the Emergency Employment and Income Preservation Benefit, the monthly compensatory aid and, in the event of a reduction in working hours, the salary paid by the employer based on working hours.

For situations not included in these cases, contracts for reducing working hours and wages or contract suspension can only be carried out by collective agreement or collective bargaining agreement.

Retired employees will only be admitted to the agreement to reduce working hours or suspension of the contract when (in addition to qualifying in any of the cases of authorization of the individual work agreement mentioned above), there is payment, by the employer, of monthly compensatory aid(1) .

The value of the monthly compensatory aid must be, at least, equivalent to the value of the Emergency Benefit (BEM)(2).

V. CONFLICT OF RULES - INDIVIDUAL AGREEMENTS X COLLECTIVE AGREEMENT

If, after the individual agreement, there is a Collective Agreement or Collective Agreement with conflicting clauses, it must be observed, first, the prevalence of the individual agreement in relation to the previous period or, second, after the execution of the CCT/ACT, the prevalence of the conditions of these “where they conflict with the conditions stipulated in the individual agreement”.

SAW. GENERAL PROVISIONS

No information or regulations from the INSS, E-Social or Ministry of Economy were made available on the permissions or platforms of the respective systems for feeding and sending information.

The maximum limit for the use of the provisions brought by Law 14.022/20 and Decree 10.422/20 runs until December 2020.

(1) Art. 9 The Emergency Employment and Income Preservation Benefit may be accumulated with the payment, by the employer, of monthly compensatory aid, as a result of the proportional reduction of working hours and salary or the temporary suspension of the employment contract referred to in this Law. (...) I – must have the value defined in collective bargaining or in the individual written agreement agreed upon; II – will be indemnifying in nature; III – it will not be part of the calculation basis of the withholding income tax or of the annual income tax adjustment declaration on the employee's individual income; IV – will not be part of the INSS calculation basis and other taxes on the payroll; V – will not be part of the basis for calculating the FGTS amount, and VI – may be: a) considered deductible operating expense in real profit and in the basis for calculating the Social Contribution on Net Income.

(2) Art. 6th The value of the Emergency Benefit will be based on the monthly amount of unemployment insurance, subject to the following provisions: I - in the event of a reduction in working hours and salary, it will be calculated by applying the percentage of the reduction; and II – in the event of temporary suspension of the employment contract, it will have a monthly amount: a) equivalent to 100% (one hundred percent) of the amount of unemployment insurance to which the employee would be entitled, in the event provided for in the caput of art. 8 of this Law; or b) equivalent to 70% (seventy percent) of the amount of unemployment insurance to which the employee would be entitled, in the event provided for in § 5 of art. 8 of this Law.

Source: Christian Charles do Carmo de Ávila.