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Brazil: Program for maintaining employment and income (COVID-19)

Medida Provisória (MP) No. 1,045 / 2021 (27 April 2021) institutes an emergency program for maintaining employment and income

Medida Provisória (MP) No. 1,045 / 2021 (27 April 2021)=

Medida Provisória (MP) No. 1,045 / 2021 (27 April 2021) institutes an emergency program for maintaining employment and income—measures adopted to respond to the coronavirus (COVID-19) pandemic. 

KPMG observation

In Brazil, a Provisional Measure (Medida Provisória) is an “act” issued by the president, with the authority of law until later approved by Congress. The Provisional Measure is effective as from its date of publication for a 60-day period, and it may be extended for an additional 60-day period (for a total of 120 days) on a request from Congress.

 

Program for employment and income

MP No. 1,045 provides for three fundamental measures:

  • Proportional reduction of hours and wages
  • Temporary suspension of employment contracts
  • Granting of the emergency benefit for maintaining employment and income

MP No. 1,045 includes rules regarding the temporary suspension of an employment contract, and provides an employee will be entitled to the monthly amount equivalent to 100% or 80% of the amount of unemployment insurance to which that employee would have been entitled, subject to measurement of the company's gross revenue. The benefit is linked to the provisional guarantee of employment for the worker, and such provisional guarantee lasts for the entire period in which the measure or proportional reduction of hours and wages or suspension of the employment contract is effective, plus an equal period after the end of the reduction or suspension.

Read a May 2021 report (Portuguese) prepared by the KPMG member firm in Brazil

 

 

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