Understand the labor changes caused by the pandemic

Understand the labor changes caused by the pandemic

Table of Contents

The increase in Covid-19 cases in Brazil forced the Federal Government to implement several labor changes caused by the pandemic. From reducing wages to helping informal workers, several measures have been taken to mitigate the impacts of the coronavirus on the economy and the labor market.

But, after all, what changed in the labor laws during the pandemic? To learn more, keep following the post!

What were the effects of coronavirus on the UK residents economy?

As it is a disease with high contagion power and without vaccine, the main recommendation of the World Health Organization (WHO) to combat Covid-19 is the social isolation style=”font-weight: 400;”>.

For this reason, several countries have enacted mandatory quarantine, determining that only essential services, such as hospitals and supermarkets, can provide face-to-face assistance.

In Brazil, although there is no position by the Federal Government, several states and municipalities have been quarantined in order to reduce the circulation of people on the streets.

That is where the negative effects on the economy come in: with the isolation, there was a paralysis of companies and the closing of non-essential trades, which resulted in a great wave of layoffs since the arrival of the coronavirus in Brazil.

To give you an idea, only in the month of May were registered 920 thousand unemployment insurance claims in the country, 53% higher than in the same period of 2021.

In this scenario, the government needed to act to help the companies and workers most affected by the crisis. And the solution found was to promote a series of labor changes due to the pandemic, as we will see below.

>> How about some tips to deal with this moment in a lighter way? Check out this other blog post: Coronavirus: how to maintain well-being in quarantine? <

What were the labor changes caused by the pandemic?

To control the losses of the crisis, the government has put in place actions aimed at minimizing the number of layoffs, providing financial assistance to the unemployed and relieving companies' cash, preventing them from having to close their doors.

Check out the main labor changes caused by the pandemic and understand how they work:

  • reduction of working hours;
  • temporary contract suspension;
  • anticipation of vacations;
  • FGTS installment payment;
  • emergency aid.

Reduction of working hours

One of the main labor changes caused by the pandemic was the possibility of reducing the workday and the employee's salary by up to 90 days. According to Provisional Measure 936 (MP 936), deductions can be 25%, 50% or 70% and they must follow the rules that we will detail below.

Emergency benefit

According to MP 936, every worker who has a reduced salary should receive a government emergency benefit based on the share of unemployment insurance to which he would be entitled if he were dismissed.

However, the employee does not receive 100% of the unemployment insurance amount, but 25%, 50% or 70%, according to the percentage deducted from the gross salary.

Another may be important: the employer can negotiate any percentage of reduced hours and wages, but the emergency benefit will always follow the basic rates of 25%, 50% or 70%.

For example: if the company arranges a 45% wage reduction with the worker, that's fine. But he will not receive 45% of unemployment insurance from the government, but 25%, according to the established rules. Likewise, for workload reductions below 25%, there is no payment of the benefit.

Calculation of benefit

To discover the value of the emergency benefit, it is first necessary to know how much unemployment insurance the worker would receive if he were dismissed. This calculation is made according to the average salary range in the last three months of the contract:

  • Up to £ 1,599.61: the salary is multiplied by 0.8 (80%);
  • From £ 1,599.62 to £ 2,666.29: what exceeds £ 1,599.61 is multiplied by 0.5 (50%) and added to the fixed amount of £ 1,279.69;
  • Above £ 2,666.29: fixed installment of £ 1,813.03.

By discovering the value of unemployment insurance, it is easy to calculate the emergency benefit, according to the rules mentioned in the previous topic.

For example: an employee who earns £ 3,000 per month had a 25% reduction in salary due to the pandemic. If he were fired, he would be entitled to unemployment insurance of £ 1,813.03, right?

So, to calculate the emergency benefit, just do:

£ 1,813.03 x 0.25 (25%) = £ 453.25

Thus, in practice, the employee will receive £ 2,250.00 from the company and £ 453.25 from the government, totaling £ 2703.25.

Deadline for payment of benefit

In order to guarantee workers access to the emergency benefit, the company must communicate the reduction of work hours to the Ministry of Economy in up to 10 days after changing the contract. Once this is done, the government must pay the first installment within 30 days.

Temporary job security

According to MP 936, working hours and wages must be reestablished within two calendar days after the end of the agreement or the state of public calamity, which is expected to last until December 31, 2021.

After this period, the employee who worked under these conditions must have his guaranteed job for the same time he worked for less.

In other words: if the person worked for 3 months on a reduced salary, he must stay at least 3 months in the position receiving full remuneration, without being able to be fired.

If the company fails to comply with this rule, it must pay the worker a 50% to 100% compensation the amount he would be entitled to receive if the contract was still in force.

Direct negotiation vs. union negotiation

Is the negotiation of this agreement done directly with the workers or does it need to go through the unions? The answer depends on the employee's salary range and the percentage of workload reduction.

If the cut is 25%, the negotiation can be done directly between the company and the employees, regardless of the salary range.

For reductions of 50% and 70%, the rules are as follows:

  • Salary of up to £ 3,135 and above £ 12,202.15: direct negotiation between company and employees;
  • Wage between £ 3,135 and £ 12,202.15: negotiation must go through a collective agreement with the union.

Even in direct negotiations, all agreements must be communicated to the respective unions within ten calendar days, starting from the initial date of the change. If damage to the worker is identified, the entities may demand collective bargaining.

Temporary suspension of contract

Another of the main labor changes caused by the pandemic was the implementation of the temporary contract suspension, also allowed by MP 936.

With it, the employee has his contract suspended, not being able to provide any service to the company, inside or outside the workplace. If this happens, the employer must pay all the remuneration and labor charges related to the period, in addition to paying the fines provided for by law and in collective agreements.

As in the reduction of working hours, workers with suspended contracts also receive the emergency benefit, although the duration of the agreement has a maximum term of 60 days, not 90.

The payment rules are also slightly different, taking into account the company's turnover in 2021:

  • Companies with gross revenue above £ 4.8 million: the company pays compensatory aid equivalent to 30% of the employee's salary and the government pays 70% of the amount he would be entitled to in unemployment insurance;
  • Companies with gross revenue below £ 4.8 million: the company does not pay any percentage of the salary and the government pays 100% of the amount that the employee would receive in unemployment insurance.

It is important to say that compensatory aid is not considered remuneration. For this reason, charges such as vacations, FGTS, EHIC and IRPF are not levied on it.

It is also worth mentioning that the suspension of the contract is not the same as a dismissal followed by a new hire. This is because, during the period without work, the employee will receive from the government part of the remuneration and benefits, such as health insurance and food stamps.

Vacation Anticipation

If the company does not wish to reduce the workday or suspend the employee’s contract, it also has the option of anticipate your vacation, according to Provisional Measure 927. This is one of the labor changes due to the pandemic that most changed the CLT rules.

This can be done even if the employee has not yet fulfilled the first 12 months of the contract. To do this, just warn him until 48 hours before of the established date, without needing the 30 days in advance determined by law.

The de vacation premium and the remuneration, which are usually paid two days before the start of the rest, also have different deadlines. The surcharge can be paid until December 20, while the remuneration can be paid up to the fifth business day of the month following the vacation.

In case of collective vacation style=”font-weight: 400;”>, companies can determine the rest without notifying the unions and the Ministry of Economy, as is customary. The annual limits of two periods of collective rest and ten consecutive days between holidays also cease to exist.

You holidays are also impacted by this MP. If they are not religious, they can be anticipated by companies, if necessary. As for religious dates, it is necessary to enter into an individual agreement with the employee before making this decision.

In the event of anticipation, the person taking advantage of the advance leave must work on the original date of the holiday without the right to 100% overtime.

Installment of FGTS

MP 927 also allows the employer to suspension and installment payment of FGTS for the months of March, April and May 2021.

These payments may be deposited in 6 installments, without interest, correction or fines, from July 7, 2021 until December.

Emergency aid

One of the most well-known labor changes due to the pandemic is the Basic Emergency Income, also known as emergency aid.

At first, the measure consisted of the payment of three installments of £ 600 monthly to the low-income population and without formal employment. In June, the Ministry of Economy extended the payment of the aid by another two months, totaling five installments.

To know the requirements for accessing the aid and registering, the person must access the site or the app created by Caixa Econômica Federal.

Now that you know the labor changes caused by the pandemic, you are prepared to face this moment in the best possible way. At this point, it is important to know your rights and duties so that everyone can overcome the crisis with the least possible damage.

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