Brazil: New Economic Freedom law has important implications for employers

Regions & Countries Brazil
Areas of Law Employment
Content Types Latest
Languages English

Overview

A new Economic Freedom law, intended to reduce bureaucracy and increase investor safety was passed into law in Brazil on 20 September 2019 (see our previous coverage of this here).


Contents

The main implications for employers are:

  •  A time recording system is no longer required for employers with 11 - 20 employees:  The threshold for recording daily working hours via a time clock or other system has increased so that now only companies with more than 20 employees must have this system in place (it previously applied to companies with more than 10 employees).   In addition, companies are now able to adopt the so called ‘time control per exception’ so that employees do not need to record their working hours on a daily basis, but will only be required to do so in the event of overtime work, delays and absences.  Many smaller companies in Brazil are already looking to adopt this approach to time recording;
  • An electronic employment record booklet will be created/issued by the Ministry of Economy; currently this is issued in hard copy only;
  • E-social, the online tax and social security reporting system, will be abolished and replaced by a much simpler system requiring less information; 
  • There is now reduced bureaucracy in place for new companies classified as “low risk activities” for example, start-ups no longer need a business/operation permit to begin operating.

 We will report further on the timelines for the new electronic booklet and e-social replacement; we expect both to be in place by the end of the year. 

Contact Information
Tim Marshall
Global Co-Chair - EMEA and Asia Pacific at DLA Piper
London
+44 207 796 6617
tim.marshall@dlapiper.com

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