Put Antonio Mazzucco and Marcos Buzo – 04/04/2020

The federal government, aiming to reduce the impacts of COVID-19 on jobs and small businesses, issued Provisional Measure No. 944, published today, April 4, 2020, which establishes the Emergency Employment Support Program (“WEIGHT”).

PESE is intended for carrying out credit operations with entrepreneurs and legal entities with gross revenue annual greater than R$ 360,000.00 (three hundred and sixty thousand reais) and less than R$ 10,000,000.00 (ten million reais), considering the 2019 financial year, specifically for payment of the company's payroll.

Furthermore, the credit line must cover the total payroll of the company, by period of 02 (two) months, but limited to up to two minimum wages per employee.

Therefore, this line will allow the employer to pay a minimum wage per month in two months for each employee. In other words, if the company has 20 (twenty) employees, the credit line offered will be worth 40 (forty) minimum wages, with the company responsibility for the payment of wage gap of those employees who earn more than 2 (two) minimum wages, unless agreed which must comply with the provisions of specific legislation.

When taking out the line of credit, companies must use the resources obtained exclusively for payroll in the manner indicated above. In addition, companies will not be able to carry out dismissals, without just cause, between the date of contracting the credit line and 60 (sixty) days after payment of the last installment.

Financial institutions will be able to carry out PESE operations until June 30, 2020, and must observe the following requirements: (i) interest rate of 3.75% (three point seventy-five percent) per year; (ii) payment term of 36 (thirty-six) months; and (iii) lack 6 (six) months to start payment.

PESE operations will be carried out with resources allocated by the Federal Union to BNDES in the total amount of R$34,000,000,000.00 (thirty-four billion Reais) and with resources of the financial institutions themselves in the proportion of 85% BNDES / 15% financial institutions and the credit risk will be supported in the same proportion.