Labor compliance refers to the set of practices, policies, procedures, and internal controls that aim to ensure a company complies with labor laws, as well as ethical and integrity standards, reducing legal risk, litigation, labor liabilities, and strengthening relationships with employees.

With the 2017 labor reform, several changes to the Consolidation of Labor Laws (CLT) have had a broad impact on labor relations in Brazil. These changes directly influence the scope, mechanisms, and necessity of labor compliance programs.

MAIN CHANGES BROUGHT ABOUT BY LAW 13.467/2017 RELATED TO COMPLIANCE

Some of the innovations of the reform that affect labor compliance:

1. Collective bargaining with greater force. The reform allowed collective agreements to prevail over certain CLT (Consolidation of Labor Laws) norms (provided that certain minimum rights are respected), increasing the importance of understanding and negotiating with unions.
2. New or more flexible contractual arrangements:

• Intermittent work (discontinuous provision of services).
• Increased feasibility of special work schedules, time banks, tasks, etc.

1. Outsourcing and responsibilityThe reform consolidated the possibility of outsourcing even for core business activities, which requires companies to improve control and oversight mechanisms for outsourcing to avoid labor liabilities.
2. Reducing litigation: A reduction in litigation has been observed in the initial periods following the Reform, possibly due to uncertainties regarding the interpretation of the new regulations. However, it is important to highlight that Labor Compliance has gained greater relevance after the Reform, which has contributed to this reduction, especially through the Compliance department's work with companies.

The Role of Compliance in This New Scenario

Given these changes, labor compliance becomes more strategic and critical for companies:

• Risk mitigationTo prevent labor law violations (working hours, overtime, special contracts, terminations, outsourcing), avoid fines, convictions, liabilities, and reputational damage.
• Legal certaintyTo ensure that internal policies, employment contracts, and procedural rules are compatible with the reformed CLT (Brazilian Labor Law), collective bargaining agreements, and emerging case law.
• Effectiveness in collective bargainingGood labor governance is essential to facilitate negotiations with unions, as it allows for an understanding of the limits of collective bargaining and the establishment of advantageous agreements within legal parameters. In this context, the involvement of a specialized firm with the union plays a fundamental role, contributing significantly to achieving positive results in negotiations.
• Operational efficiencyLitigation generates costs (both direct and indirect); compliance can reduce these costs, including those of legal proceedings. Research indicates a reduction in litigation in companies with effective labor compliance programs.

Challenges of Labor Compliance Post-Reform

Some of the challenges that arise:

1. Jurisprudential uncertaintiesMany aspects of the reform raise questions regarding their interpretation (e.g., parameters for moral damages, the concrete application of intermittent work, the limits of collective bargaining), so companies need to keep up with court decisions.
2. Internal capacityNot all companies have the adequate legal or compliance structure to implement a robust program involving human resources, legal counsel, internal audit, and controls. In this sense, having a specialized partner firm makes a significant difference, providing the necessary support to ensure the program's compliance and effectiveness.
3. Risk mappingIdentify all vulnerable areas, work schedules, contracts, outsourcing, collective agreements, etc.
4. Organizational cultureCompliance is not just about regulations, but about an ethical culture, training, and awareness-raising among managers and employees.
5. Continuous monitoringLaws, collective agreements, and judicial decisions continue to evolve; compliance programs must be dynamic.

Practical guidelines for implementing labor compliance.

Here are some steps or best practices for companies that want to implement or improve their labor compliance program:

1. Commitment from senior managementWithout management support and broad knowledge, it is difficult for compliance to be effective.
2. Initial compliance assessment (Labor due diligence): mapping contracts, work schedule practices, health and safety environment, outsourcing, collective agreements, and existing liabilities.
3. Development of a labor compliance policy.A clear document that establishes rules, responsibilities, procedures, reporting channels, internal sanctions, and control criteria.
4. Training and capacity buildingManagers, HR, supervisors, and employees should know their rights and responsibilities, understand the new labor laws, and know how to use reporting channels.
5. Review of contracts, practices and collective clauses: to adapt intermittent contracts, flexible work arrangements, outsourcing, etc., ensuring that they are legally valid.
6. Internal controls and audits: establish mechanisms for periodic verification (compliance audit), non-conformity reports, and corrections.
7. Whistleblowing channelSecure access for employees to report irregularities, with guarantees of anonymity or protection and proper investigation.
8. External monitoringTo monitor judicial decisions, case law from the Superior Labor Court (TST) and Regional Labor Courts (TRTs), precedents, and guidelines, in order to adjust practices based on new interpretations.
9. Reactive measuresIn addition to prevention, have a plan to respond to any complaints or fines, with appropriate internal or legal action.

OBSERVED IMPACTS AND TRENDS

• An initial drop in the number of labor lawsuits after the reform, but this does not always reflect a permanent reduction in litigation, and may be the result of adaptation, apprehension, or delays in filing new claims. However, a good compliance program and effective legal counsel can contribute to maintaining this reduction, preventing the return of litigation in the long term.
• Increased use of intermittent and part-time work arrangements, which requires stricter control of proportional rights.
• Outsourcing has become more widespread and common; companies that hire outsourced workers are more exposed to subsidiary liability and the risk of labor liabilities if they are not diligent.
• Businesses adopting compliance as a competitive advantage: reputation, talent attraction, credibility with clients, regulatory bodies, etc.

CONCLUSION

Law 13.467/2017 profoundly altered the landscape of labor law in Brazil, introducing flexibility, negotiability, and new contract modalities, all within a context of risk of litigation and interpretative uncertainties.

Labor compliance emerges as an essential tool for companies that wish to operate with legal certainty, minimize labor liabilities, and maintain a culture of integrity. To be effective, this compliance must go beyond "meeting the minimum legal requirements" and involve diagnosis, policies, controls, culture, and case law monitoring.

Companies that invest in well-structured labor compliance tend to have advantages: reduced litigation costs, increased legal certainty, a better institutional image, and more transparent and predictable labor relations.