Brazil Will Allow Companies to Cut Salaries and Workload by Half

Guedes says measure will save jobs; R$200 voucher also announced for informal workers


The Jair Bolsonaro government will allow companies to cut workers' wages and wages by up to 50% amid the progress of the coronavirus crisis. The initiative must be sent to Congress by MP (provisional measure).

The Ministry of Economy says the measure, which requires individual negotiation, will preserve jobs. “It is necessary to offer ways for companies and employees to overcome this period of turbulence. Both are interested in preserving jobs and income ”, stated the Labor Secretary, Bruno Dalcolmo.

Paulo Guedes. (Foto: Pedro Ladeira/Folhapress, PODER) - Folhapress

Under the rules mentioned by the ministry, companies must continue to pay at least the minimum wage. Nor can the hourly wage of the worker be reduced.

The proportional reduction in hours and wages may last as long as the state of emergency is in effect. This week, the government sent Congress a request to establish a state of emergency until the end of this year.

However, the economic team believes that there may be an improvement in the economy before that, in up to four months, which would make companies normalize their contracts.

Members of the ministry do not rule out the adoption of even deeper measures. One of the ideas debated is allowing the suspension of the employment contract so workers can access to unemployment insurance.

Translated by Kiratiana Freelon

Read the article in the original language