On 4/1/20, the government issued Provisional Measure (MP) 936 with the objective of preserving employment and income, making economic activity feasible, given the reduction in activities and reducing the social impact due to the consequences of the state of public calamity and public health emergency.
Measures of the Emergency Employment and Income Maintenance Program are:
I – the payment of an Emergency Job and Income Preservation Benefit;
II – the proportional reduction of working hours and wages; and
III – temporary suspension of the employment contract.
1 – Emergency benefit for the preservation of employment and income
The Benefit will be financed by Federal Union resources for the duration of the reduction or suspension of the contract and will be paid directly to the employee who has accepted to reduced working hours or suspension of employment contract, in the terms of the MP, regardless of the fulfillment of the acquisition period, the length of employment or the number of employees. wages received.
The value of the benefit will be based on the monthly unemployment insurance amount to which the employee would be entitled and does not prevent the concession or change the amount of unemployment insurance to which the employee is entitled.
Anyone who receives any benefit from the continued provision of the General Social Security Regime or the Public Servants` Social Security Regimes or on unemployment benefits program will not be entitled to the benefit.
Pensioners and accident-relief holders can receive it.
The monthly compensatory allowance eventually granted by the employer (provided for in item III) will not have a “salary nature” (for payroll taxes purposes), and therefore will not be part of the calculation base of income tax at source or in the individual’s adjustment statement, nor of the basis of calculation of the social security contribution and other taxes on the payroll and nor included in the calculation base of the amount due to the FGTS (Unemployment Benefit Fund).
2 – Proportional reduction of working hours and wages
According to the MP, companies may agree to proportionally reduce their employees’ working hours and wages, for a maximum period of 90 days, during the state of public calamity, respecting the following conditions:
- Maintain the value of hourly wages when calculating the reduction;
- Sign individual written agreement between employer and employee, the proposal must be sent to the employee 48 hours in advance
- Do not dismiss the employee during the reduction period and after the reinstatement of the day for a period equivalent to the reduction. Example: reduction of 2 months, guarantees stability of 2 months and of 2 more, for a total of 4 months
The reductions may be 25%, 50% and 70% of the workday and proportional to the employee’s salary and the government’s counterpart will be 25%, 50% and 70% of the amount of unemployment insurance that he would receive if he were dismissed to supplement the salary. employee’s income.
To this end, the government advises to enter into a Collective Agreement covering all employees if the reduction covers the entire framework and Individual Agreements, as shown in the following table:
| Reduction | Amount of the Benefit | Individual Agreement | Union Collective Agreement |
| 25% of the employee`s monthly salary | 25% of unemployment benefit | All Employees | All Employees |
| 50% of the employee`s monthly salary | 50% of unemployment benefit | Employees with salaries from R$ 3.117 or over R$ 12.202,12 | All Employees |
| 70% of the employee`s monthly salary | 70% of unemployment benefit | Employees with salaries from R$ 3.117 or over R$ 12.202,12 | All Employees |
3 – Temporary suspension of the employment contract
By the MP, companies may agree to suspend the employment contract with employees. These employees will receive the Emergency Job and Income Preservation Benefit for a maximum period of 60 days, subject to the following conditions:
- Sign an individual agreement for the suspension of the written employment contract between employer and employee, and the proposal must be sent to the employee 48 hours in advance;
- Maintain the benefits paid to employees during the contractual suspension period;
- During the suspension of the employment contract, the employee cannot remain working for the employer, even partially, through teleworking, remote work or distance work;
- Do not dismiss the employee during the suspension period and after the reinstatement of the day for a period equivalent to the suspension period.
| Gross Revenue of Company | Monthly Compensation paid by the Emplyer | Amount of the Benefit | Individual Agreement | Union Collective Agreement |
| Up to R$ 4,8 million / year | Non mandatory | 100% of the amount of the Unemployment Benefit | Employees with salaries from R$ 3.117 or over R$ 12.202,12 | All Employees |
| Over R$ 4,8 million / year | Mandatory – 30% of employee`s salary | 70% of the amount of the Unemployment Benefit | Employees with salaries from R$ 3.117 or over R$ 12.202,12 | All Employees |