Wage and working hours reduction program ends without extension

The Emergency Program for the Maintenance of Employment and Income (BEm) came to an end this Wednesday (25), the last day for companies to sign agreements to reduce working hours and wages or to suspend employment contracts. The text of Provisional Measure (MP) No. 1,045, of April 27, 2021, provides that the new edition of the BEm would last for 120 days, ending this Wednesday.

The term of the program will not be extended by the federal government. For this, the measure would need to be approved in Congress. The MP’s substitute text, by Deputy Christino Aureo (PP-RJ), was approved by the Chamber of Deputies]two weeks ago and was sent to the Senate, where it will be analyzed. The approved version also allows the BEm to be reissued in future public health emergencies or in a state of calamity.

Launched last year as one of the measures to face the economic crisis generated by the covid-19 pandemic, the program benefited around 10 million workers in agreements that had the adhesion of nearly 1.5 million companies. This year, since it was relaunched in April, until the 17th of August, more than 2.5 million workers [https://agenciabrasil.ebc.com.br/politica/noticia/2021-04/bolsonaro-relanca-programa-de-reducao-de-salarios-e-jornada] obtained the provisional guarantee of employment through an agreement with 632.9 thousand employers.

The Ministry of Labor and Welfare has a public panel with data from BEm.

The program provides for the reduction of wages or the suspension of contracts along the same lines as in 2020. Individual agreements between employers and employees can be to reduce the working hours and wages in percentages of 25%, 50% or 70%.

In return, the government pays the worker the Emergency Benefit on a monthly basis, which corresponds to a percentage of the portion of unemployment insurance that the employee would be entitled to if he were fired. The benefit is paid with resources from the Worker’s Support Fund (FAT).

In practice, a worker who had a 25% reduction in salary receives 25% of the amount of unemployment insurance he would be entitled to, and so on. In the case of temporary suspension of employment contracts, the government pays the employee 100% of the unemployment insurance amount, for companies with gross income of up to R$ 4.8 million in 2019. In companies with income above this level, the worker receives 70% of the insurance amount and 30% of the salary.

In all cases, the temporary employment guarantee is recognized during the agreed period and after the re-establishment of the workday or termination of the suspension, for an equal period. For example, a 90-day working day reduction agreement must guarantee the worker to remain in employment for another 90 days after the agreement ends.