FGTS is an employee right provided for in CLT law. Companies have to make a monthly discount of 8% on the employee’s salary. FGTS functions as a savings account that protects employees if they are fired without cause.
Did you know that Late FGTS cause penalties to the debtor company? Despite being an obligation foreseen by the CLT, the payment of FGTS creates many problems, both for the employee and the employer. Check out a special guide on late FGTS, rights and duties of the parties involved.
What is FGTS
THE FGTS (Guarantee Fund for Time of Service) is a savings, linked to the employment contract, which protects the professional in case of dismissal without cause. Employees who work for CLT automatically acquire this benefit.
This savings was created in 1966 by the then president Marechal Castelo Branco. At the time, the FGTS functioned as a form of job stability. It was called ten-year stability, in which after 10 years the employment contract became stable and could only be broken in the case of just cause.
Anyone who left the job before turning 10 would receive compensation. With the emergence of FGTS, after this period of work completed, if there was an unfair dismissal, the severance pay was doubled.
How does FGTS work?
FGTS works as a savings account that protects employees if they are dismissed without just cause. The company responsible for the employee binds to the contract an account opened at Federal Savings Bank, where it makes monthly deposits deducted from the employee’s salary. The value corresponds to 8% of the salary of each professional.
Who is entitled to FGTS?
Before knowing the particulars of the delayed FGTS, it is necessary to know who is entitled to receive it. Check it out below:
- Rural workers;
- Professionals who perform intermittent work, according to the CLT;
- Workers temporary;
- Individual workers;
- Safreiros, who work at harvest time;
- Professional athletes (volleyball, soccer players, etc.);
- Non-employed directors (optional);
- Domestic workers.
Thus, companies that do not collect FGTS in relation to the workers mentioned in the list above become delinquent in the face of work justice.
It is important to emphasize that the payment of FGTS is the responsibility of the company and not of the employee.
Understand the FGTS calculation
Every month, companies that have professionals in the CLT regime they need to collect an amount of 8% based on the salary of their employees. Therefore, an employee who earns £ 3000, for example, will have a monthly discount of £ 240.
However, there is a particularity in the FGTS discount of the young apprentice. In this case, the discount is 2%. That is, if he receives £ 1500 the discount is £ 30.
When the company is not aware of the law or when there is not enough money, the late FGTS it becomes a problem.
And, many times, the error is only noticed when a dismissed employee tries to access his right and realizes the irregularities.
Get to know some delayed FGTS data
THE Late FGTS it can bring countless losses to the employer and also to the employee. And these losses only grow over the years. A survey by Attorney General of the National Treasury, held in 2017, showed that there were more than 213 thousand debtors and the overdue FGTS balance exceeded £ 27.8 million.
About 7 million people are injured with problems of this nature, due to irregular deposits or the absence of the benefit. More than 98 thousand companies owe the FGTS.
The survey also shows that, adding the 15 most debtor companies, the number exceeded £ 2 billion in debt.
São Paulo led the list in the number of companies with arrears FGTS, with a debt of more than £ 8 billion in debt, with 52,800 debtor companies.
Soon after, Rio de Janeiro appears, with 27,700 companies and more than £ 4 billion in debts.
How to check my FGTS?
Knowing that FGTS is a right we already know. Now how do you know if there is a delay and if the company pays this benefit correctly?
There are some possibilities to track deposits.
- FGTS extract: a every two months Caixa Econômica sends a document to each of the workers with the FGTS extract. Through this document, you monitor whether there is Late FGTS;
- Caixa.gov.br: access the website with your PIS number in hand and with the password of the citizen card;
- Via SMS: to facilitate access to data by the employee, it is currently possible to receive the updated FGTS amount via cell phone message. In this service, the employee has all the account movement information;
- FGTS Application: install the app on your phone and access it whenever you want to check deposits, update your data as an address etc. The FGTS Worker App is available for Android and IOS;
- ATMs: people who have a citizen card are able to check the FGTS payment through ATMs of Caixa Econômica Federal.
What to do when you notice the FGTS delayed?
When realizing that there is the Late FGTS, the employee must first contact the company and report what happened. If there is no agreement, the professional must file a labor claim to claim his right.
It is recommended that employees keep the payment statements, after all they serve as proof that deposits have been made.
THE Late FGTS it must be paid with the necessary monetary corrections and at once, by the debtor company.
It is still possible to appeal to the rights of the Late FGTS with the union of the employee category or through a complaint, even if anonymous, to the Ministry of Labour.
Know the penalties of late FGTS
All guidelines and penalties related to late FGTS are provided for in the article 477 of the CLT law.
In addition to fines, the late FGTS can cause expenses to the company, in relation to the labor lawsuits and contractual issues.
THE Late FGTS can even cause the indirect contract termination, in which the employee requests a breach of contract, due to non-compliance with the employer’s obligations.
In these cases of indirect termination, professionals are entitled to receive the same benefits as unfair dismissals, such as, for example, the payment of 40% of fine on FGTS.
Below, find out how to pay FGTS late from an employee.
Find out how to calculate the delayed FGTS
To calculate the Late FGTS, the company needs to take into account some items such as:
Adding this employee’s income, a multiplication of 8% is made, the percentage equivalent to the FGTS.
It is also necessary to include in the Late FGTS due fines for late payment. In addition to default interest, the type of penalty imposed on debtors, and the reference rate, which is based on interest in the UK residents economy.
FGTS late in dismissal
Regardless of how the employee leaves the company, FGTS needs to be up to date. All deposits need to be regularized, even in the case of resignation.
If the payments have not been paid correctly over the years, the debt must be paid off when the professional leaves. Remembering that all delays will be reviewed and monetarily corrected.
In cases of unfair dismissal, the company is responsible for depositing an additional 40% fine on the total value of FGTS accounts. And in case of consensual resignation, the fine is 20%.
Deadlines to appeal the late FGTS
According to the decision of the STE, since 2021 the employee can no longer resort to the FGTS overdue for the past 30 years. The deadline dropped to five years, as reported by the newspaper The globe.
Who owned labor claims against companies before November 2014 and who filed a lawsuit to appeal the payment of the Late FGTS after November 2021, when the deadline came into force, it did not change with the novelty.
When can I withdraw FGTS?
FGTS can be withdrawn in numerous situations, and the main ones are:
- Resignation without just cause;
- Use of value for the purchase of real estate or in the treatment of serious illnesses.
These are some of the cases in which the employee can withdraw the full amount of his FGTS.
Withdrawals can be made directly at Caixa Econômica Federal branches. Normally, the following documentation is required for the withdrawal:
- Identification document;
- Work card;
- Termination term;
- PIS number;
- Work card;
- Citizen Card.
These are the documents requested in most cases, but they may vary depending on the case of termination.
Late FGTS FAQ
FGTS deposit date
Do you know how long can the company delay FGTS?
All employers have until the 7th of each month to collect FGTS from their employees.
If the 7th is not a business day, it is brought forward to the first business day prior to the date in question.
It is worth remembering that, according to Caixa, Saturdays, Sundays and national holidays based on Central Bank calendar do not count as business days.
How to regularize the delayed FGTS situation
Just as there are countless possibilities for the employee to monitor the payment of the FGTS, companies also have facilities to regularize their situation before the law to pay the FGTS late.
THE FGTS Company Collection and Social Security Information System (SEFIP) emerged to streamline this process.
Through a program available on the Caixa website for download, the company can make deposits of what it owes to the employee.
Through this application, the financial and registration data of employees are consolidated in one place. And, with that, the collection file of the Late FGTS for payment.
Observation: every new month, new coefficient tables are published, which remain in effect until the 9th of the following month.
When calculating the FGTS in arrears, the company should be aware that there will be fines. Do you know what is the interest rate on FGTS in arrears?
In the table below you can see the legal fees foreseen in the payment of FGTS in arrears.
Source: Federal Savings Bank
However, there is another fixed fine, applied in these cases, which corresponds to 5% of the amount that must be paid to the employee.
The inconvenient role of the delayed FGTS
THE Late FGTS it is a serious problem and it can be quite costly for companies. In addition to causing fines and labor lawsuits, which bring serious losses to the company, failure to comply with the law can stain the company’s image in the market.
Companies that do not respect the employee’s rights, such as the FGTS payment, have difficulties to become competitive in the market.
Therefore, to avoid problems with labor justice, be aware of this right.
It is necessary to have a personal department prepared, who knows the law, in addition to the rights of the employee and the company. Mainly due to the particularities of the law in relation to the FGTS and its possible penalties.
Did you like our article on Late FGTS? Check it out HR Consultants UK’s blog other content that can help you in the management of your company.