Brazil: New Law Creates Emergency Employment and Income Maintenance Program

(July 8, 2020) On July 6, 2020, Brazilian President Jair Bolsonaro signed a new law passed by Brazil’s National Congress aimed at reducing the economic and social impacts of the COVID-19 pandemic on the country. The law was published on July 6, 2020, and took effect immediately.

Law No. 14,020 creates the Emergency Employment and Income Maintenance Program and provides for complementary measures to deal with the states of public calamity and public emergency recognized by Legislative Decree No. 6 of March 20, 2020, and Law No. 13,979, of February 6, 2020, respectively. (Law No. 14,020, art. 1.)

The objectives of the emergency program are to preserve employment and income, guarantee the continuity of work and business activities, and reduce the social impact resulting from the consequences of the state of public calamity and the public health emergency. (Art. 2.)

The measures instituted under the emergency program include the payment of an emergency employment and income preservation benefit, the proportional reduction of working hours and wages, and the temporary suspension of employment contracts. (Art. 3.) These measures do not apply, relative to the federal government (União), the states, the Federal District, and the municipalities, to direct and indirect public administration bodies; public companies; mixed-capital companies, including their subsidiaries; and international organizations. (Art. 3(sole para.).)

The new law makes it incumbent upon the Ministry of Economy to coordinate, execute, monitor, and evaluate the emergency program and to enact complementary rules necessary for its execution. (Art. 4.) In addition, the ministry must publish weekly, by electronic means, detailed information on the agreements signed, including the number of employees and benefited employers, as well as the number of monthly dismissals and admissions made in the country. (Art. 4(sole para.).)

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