This report covers Brazil’s recently published labor law reform legislation that significantly amends the rights and responsibilities of employers, employees, and unions.
On July 14, 2017, Brazil’s Law 13.467/2017 was enacted, introducing several amendments popularly referred to collectively as the “labor law reform.”1 These reforms cover such rights and responsibilities as collective bargaining, vacation hours and pay, termination (severance) pay, the tax treatment of medical insurance contributions and travel allowances, etc., and set down the roles of employers, unions, and employees and the obligations governing relations between them. The Law also stipulates new rules around the effect on FGTS2 when paying severance, as well as the impact on social security and FGTS calculations when providing travel allowances.
All employers in Brazil are obligated to comply with the new rules, and employees in Brazil, including international assignees in Brazil, subject to the country’s labor laws, should be familiar with their rights and responsibilities under the new rules, as they will soon come into effect.
Failure by employers to fulfill their obligations under the new rules could lead to fines and other sanctions.
Highlights of some of the Law’s measures include:
The amendments introduced by Law 13.467/2017 will take effect 120 days following the Law’s publication, during which period an organization’s labor law practices and policies should be adjusted to accommodate the new requirements stipulated by the terms of the Law. If the Brazilian government publishes the related Provisional Measure in the days ahead, the recently published Law may be subject to modifications.
For a full report on this development, see (in Portuguese) “Reforma Trabalhista: Lei n. 13.467/2017” in Tax News, (24 Julho 2017) or (in English) “Labor Law Reform: Law no. 13.4676/2017,” in Tax News, publications of the KPMG International member firm in Brazil.
1 Law 13.467/2017 (Lei Ordinária nº 13467 de 13 de Julho de 2017) was published in the Diário Oficial da União - Seção 1 - 14/7/2017 (Brazil’s official journal). Law 13.467/2017 formalizes and triggers the implementation of around 100 amendments to the Consolidated Labor Laws (Consolidação das Leis do Trabalho or “CLT”), in addition to amending Law 6.019/1974 (Temporary Labor and Outsourcing), Law 8.036/1990 (Employee Time of Service Guarantee Fund - FGTS) and Law 8.212/1991 (Social Security).
2 FGTS stands for “Fundo de Garantia do Tempo de Serviço,” which is a type of personal reserve savings scheme for employees.
The information contained in this newsletter was submitted by the KPMG International member firm in Brazil.
© 2019 KPMG Tax Advisors-Assessores Tributrios Ltda., a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.