Currently, much has been said about the minimum wage 2021, because of the draft Budgetary Guidelines Law (LDO), which was sent by the Ministry of Economy to the National Congress and which stipulated the amount of this remuneration.
The minimum wage is essential for standardize work in Brazil and its increase depends on issues such as inflation and the country's GDP the previous year. And also the projections of the economy for the following year.
Important points are those that are being discussed and, therefore, in this article we will understand better about the minimum wage 2021 based on the following reflections:
- What is the minimum wage and when did it appear;
- How the minimum wage is calculated;
- Overview of the 2021 minimum wage increase;
- Effective date of the new minimum wage 2021.
According to information from the Inter-Union Department of Statistics and Socioeconomic Studies (DIEESE), the minimum wage is the reference remuneration for more than 49 million workers in Brazil.
Undoubtedly, it is an important topic for both the employer and the employee. And so, we will clarify the most important points below, do not miss it and find out about the minimum wage 2021.
What is the minimum wage and when did it appear?
As the name itself makes clear, the minimum wage is the lowest legal remuneration that a company must pay to its employee.
In Brazil, the minimum wage was created in 1936, but only in 1940, with Getúlio Vargas, which was regulated in a more similar way to what we know today.
The minimum wage exists not only in Brazil, but in 90% of the countries in the world. Some examples are:
In addition to Australia and New Zealand, which were the first countries to implement it, in the 19th century.
Rules for the payment of the minimum wage
In the 1988 Constitution of the Federative Republic of Brazil, which we follow, the minimum wage is described in Decree-Law No. 5,452, of May 1, 1943, in the following text:
CHAPTER III – MINIMUM WAGE
Art. 76 – Minimum wage is the minimum consideration due and paid directly by the employer to every worker, including rural workers, regardless of sex, for a normal day of service, and capable of satisfying, at a certain time and region of the country, the your normal needs for food, housing, clothing, hygiene and transportation.
In a more philosophical way, the main objective of stipulating a minimum wage is set a work value limit floor so that every worker has access to the minimum resources for a dignified life and some financial well-being.
For this reason, it is described in detail in the Labor Law. And it is so important and much discussed every year by government cells and the population.
Obligations of the employer in the payment of the minimum wage
It is also important to remember that guaranteeing the minimum wage does not mean that the employer does not have to comply with all the labor benefits also stipulated by law.
This issue is described in Article 81, of the same Decree-Law cited above, by the following text:
Art. 81 – The minimum wage will be determined by the formula Sm = a + b + c + d + e, in which “a”, “b”, “c”, “d” and “e” represent, respectively, the value daily expenses with food, housing, clothing, hygiene and transportation necessary for the life of an adult worker.
- 1º – The portion corresponding to food will have a minimum value equal to the values in the list of provisions, contained in the tables duly approved and necessary for the daily food of the adult worker.
- 2 – Food, when the conditions of the region, zone or sub-area advise, may be substituted by the equivalents of each group, also mentioned in the tables referred to in the previous paragraph, subject to the nutritional values determined in the same tables.
- 3 – The Ministry of Labor, Industry and Commerce will periodically review the tables referred to in § 1 of this article.
For this, contact with the union of each work segment is very important for the employer to correctly follow the guidelines.
Read too: Impacts of labor reform: Unions
Regional minimum wage
In some states in Brazil, there is the regional minimum wage or regional floor, as it is also called.
This salary differs slightly from the minimum wage established by the union. It is a law that all regional minimum wages must be higher than the national minimum.
All formal workers in the state benefit from this slightly higher salary, except workers with a minimum wage defined by federal law; collective labor agreement or agreement and; for learning contracts.
Here are some examples of states and their definitions of regional wages:
- Sao Paulo (£ 1,163.55)
- Rio de Janeiro (£ 1,238.11)
- Rio Grande do Sul (£ 1,237.15)
- Santa Catarina (£ 1,158.00)
- Parana (£ 1,509.02)
How is the minimum wage calculated?
Before we understand, in fact, what is the panorama about the increase in the minimum wage 2021, which has caused so much controversy, we need to clarify how the minimum wage was calculated until then.
The Constitution states that the minimum wage must be corrected, at least, by the variation in inflation, measured by the National Consumer Price Index (INPC) of the previous year.
INPC was created just for protect the purchasing power of wages of the UK residents population.
However, in recent years, the minimum wage has been readjusted considering the variation in INPC and also the variation in GDP (Gross Domestic Product), both from the previous year.
When GDP is negative, therefore, as in 2017 and 2018, the number should be considered zero and there is no readjustment in the value of the minimum wage, even with the increase in inflation, which reduces the population's purchasing power.
In general, it is based on these parameters that the minimum wage is calculated. We will now proceed to understand what is being programmed by the Ministry of Economy for the minimum wage amount of 2021, which differs a little from what was presented above.
Overview of the 2021 minimum wage increase
Now that we know what it is, when it appeared and how the minimum wage is calculated, it is time to understand the whole controversy behind the project. Budget Guidelines Law (LDO) of 2021 presented by the Ministry of Economy to the National Congress.
The draft Budget Guidelines Law (LDO) has as its main purpose to guide the preparation of fiscal and social security and investment budgets of the Public Power, including the Executive, Legislative, Judiciary and public companies and autarchies.
Every year, the Ministry of Economy presents this plan to the National Congress to stipulate what actions will be taken on top of the budget programmed for the following year.
The minimum wage amount of 2021 is part of this project, as it directly interferes with the payment of taxes by employers.
In addition, of course, to the payment of retirements by the EHIC (National Social Security Institute).
The proposed readjustment
This year, the project presented foresees an increase based only on inflation in 2021, which means that there will be no real increase, that is, above inflation and above the GDP increase, which was what had been happening in recent years.
The last project sent by the government £ 1,079 to £ 1,067 the proposal for the minimum wage in 2021.
The increase in the minimum wage in 2021 will be £ 22 in relation to the minimum wage in 2021, which is £ 1,045, if followed in this way,
The explanation of the special secretary of Finance, Waldery Rodrigues is that to have a real increase in the minimum wage in 2021, above the INCP, there would have to be a drastic reduction in expenses.
“If there is an increase in this direction, another primary expenditure will have to be reduced. Recalling the effect that the minimum wage has on expenses: last year, £ 1 more in the minimum wage we had £ 300 million more in expenses. If we have an increase above what was placed – any amount – we will have to have another expense cut, ”he says.
Possible rise in unemployment
The possible increase in unemployment is also one of the arguments of the Ministry of Economy to continue in this way with the increase in the minimum wage in 2021. In defense of this premise, the Minister of Economy, Paulo Guedes, points out:
“Today, if you increase the minimum wage, at least thousands and perhaps millions of people will be fired. You are in the middle of a terrible job crisis. Everyone is unemployed. If you give a salary increase, you will condemn people to unemployment. ”
In addition, the minister argues that the increase in the minimum wage, as it was done until then, stimulates inequality in the country, since it is a value that also serves as a basis for other readjustments.
“The big problem is that the minimum wage, which was an instrument for the protection of workers in the formal market, ended up becoming the basis even for readjustment. A person who earned £ 30 thousand, for example, from retirement, when you changed the minimum wage, you also had to push this structure upwards. You encourage inequality, ”he says.
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Effective date of the new minimum wage in 2021
Generally, the new minimum wage starts on the first day of the year. So it is important, right now, that the employer prepare your forecast and your HR team for this change on the first of January.
The main updates that must be made to the employees' workbooks are:
- the date of the increase,
- the new value,
- the position,
- the reason for the change.
It is important to remember that it is also law that a company cannot never lower the salary of a collaborator, just increase.
This law is even stricter when it comes to the minimum wage, since it is the minimum necessary for the support of the employee.
So, if you are an employer, keep an eye out for these changes annually. Especially when there is a change of government, as the ways of administering the public budget are always modified.
In fact, with all this change in the 2021 minimum wage schedule, be sure to read our article How to update an employee's salary on the job card ?. Thus, for sure there will be no error when it comes to registering the readjustments of your employees.
Salary, benefits and financial health
20 million UK citizens are tied to overdraft and at what level does your company care about the financial health of its employees?
It is likely that your employees are suffering from financial stress, especially after a year like 2021.
But what can your company do? A lot, after all, problems related to stress affect the mental health and productivity of its employees.
For some time, companies ignored the financial problems of their employees, today, however, this reality has been changing. The stress generated by debts and other problems can directly impact the result of this professional, within the business.
In this scenario, more and more companies are offering as a corporate benefit the on-demand salary.
THE HR Consultants UKy it is a application that allows employees to anticipate part of their salaries whenever they want in a simple and instantaneous way.
Believe me, the benefits for the company are also many such as:
- decrease in turnover;
- productivity increase;
- attracting and retaining talent.
Read more at: Stop ignoring your employees' financial well-being style=”font-weight: 400;”>!
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