Work Hours Reduction and Suspension Program Relaunched by the Federal Government

On Wednesday, April 28, the Federal Government relaunched the Emergency Employment and Income Maintenance Program through the publication of Provisional Measure No. 1,045/2021. Originally created last year, the measure authorizes the reduction of working hours and wages, as well as the temporary suspension of employment contracts. This time, the measure will be valid for 120 days, with the possibility of extension by presidential decree.

Wage Reduction and Contract Suspension

Wage reduction can be set at 25%, 50%, or 70%, for a period of up to four months. The suspension of employment contracts may also last for the same duration.

Job Stability

Workers who have their wages and working hours reduced or their contracts suspended will be entitled to job stability for a period equal to the duration of the reduction or suspension. For example, if a contract is suspended for three months, the employee will have job security during those three months, plus an additional three months afterward—totaling six months of guaranteed employment. If the employee is dismissed without just cause during this period, they will be entitled to compensation.

Benefit Payment

The measure also reinstates the Emergency Benefit for the Preservation of Employment and Income. This benefit is paid by the Government to workers enrolled in the program and is proportional to the amount of unemployment insurance they would otherwise receive.

• For example, if a worker’s salary is reduced by 25%, they will receive 75% of their wage from the employer, and the Government will cover the remaining 25% through the benefit.

• In cases of contract suspension, the worker will receive 100% of the unemployment insurance amount as a benefit.

  
  

Agreements

• For workers earning up to three minimum wages (R$ 3,300.00), agreements for wage and hour reduction can be made individually.

• For those earning between three minimum wages and twice the INSS ceiling (R$ 12,867.14), reductions must be negotiated through a collective agreement.

How to Join the Program

Companies interested in joining the program must register through the Empregador Web platform (click here). Once the agreement is signed, the Emergency Benefit will be deposited directly into the worker’s account by the Government within up to 30 days.