Government extends period for suspension of employment contracts and salary reduction.

The decree extending the suspension of employment contracts for two months and the reduction of salaries and working hours for employees of private companies for another month was published this Tuesday (14) in the Official Gazette of the Union. The text regulates Law 14.020, of 2020, approved by the National Congress and sanctioned last week, which established the Emergency Program for Maintaining Employment and Income.

Proposed by Provisional Measure 936/2020, of April 1st, the program authorized employers to alter salaries and working hours during the Covid-19 pandemic in Brazil. Initially, the plan was for employees to have their contracts suspended, with payment of a portion of unemployment insurance for two months, or to have their salaries and working hours reduced by 25%, 50%, or 70% for three months, with a salary supplement also granted by the government.

During its passage through Congress, lawmakers authorized the Executive branch to extend this reduction for as long as the pandemic lasts (the state of public calamity in the country ends on December 31). The decree published today details the deadlines.

Maximum deadlines

The presidential decree increases the maximum periods for both situations (contract suspension or salary reduction) to 120 days:

• For the proportional reduction of working hours and salary, 30 days are added, increasing the total from the current 90 days to 120 days.
• For the adoption of the temporary suspension of the employment contract, an additional 60 days are granted, increasing from the current 60 to a total of 120 days. The decree allows the contractual suspension to be split into successive or alternating periods of 10 days or more, respecting the total period of 120 days.

The measure also extends the emergency aid of R$ 600 for another month for employees with intermittent contracts signed up to the date of publication of MP 936.

Source: Senate Agency