Put Rafael Mello and Israel Carneiro Cruz  –  07/07/2020

On 06/07/2020, the President of the Republic sanctioned law 14.020/2020, which establishes the “Emergency Employment and Income Maintenance Program” due to the conversion of Provisional Measure 93/2020 (MP 936/2020).

As is known, MP 936/2020, now converted into law 14.020/2020, promoted temporary changes in labor legislation aiming to “preserve employment and income”, “ensure the continuity of work and business activities” and “reduce the social impact resulting from the consequences of the state of public calamity and the public health emergency”, as reproduced in article 2 of law 14.020/2020 published in the Official Gazette of the Union on July 7, 2020.

The main measures of the “Emergency Employment and Income Maintenance Program” are provided for in article 3 of law 14.020/2020, being the “payment of the Emergency Benefit for the Preservation of Employment and Income”, “the proportional reduction of working hours and wages” and “the temporary suspension of the employment contract”.

Law 14,020/2020 consolidated the exceptional and temporary parameters previously set by MP 936/2020, especially in relation to the following 3 topics: (i) Reduction of Working Hours with Reduction of Salary (25%, 50% or 70%), (ii) suspension of the employment contract for a maximum period of 60 days that can be divided into up to two periods (layoff), (iii) benefit to the worker via unemployment insurance when there is a reduction of more than 25% or suspension of the contract.

Law 14.020/2020 still needs to be regulated by decree, but it is expected that the extension of the application of emergency measures will last for at least another 2 months.

We are available to provide clarifications on the application of the “Emergency Employment and Income Maintenance Program”, whether to extend the effects of measures already adopted or for those companies that intend to apply such measures for the first time.