FGTS payment and Provisional Measure 927

Ariadne Fabiane Velosa
Lawyer at Marcos Martins Advogados

Provisional Measure No. 927 was issued on March 22, 2020, with the aim of promoting some changes to the CLT to provide legal regulation of the economic situation, in view of the social isolation measures enacted by state governments.

Thus, in view of the mandatory closure of numerous companies and economic activities, as well as the migration of many work activities to the home office format or also known as teleworking and the totality of changes that point to a possible economic recession, these new labor regulations came to minimize a situation of uncertainty about the scope, effect and duration of the pandemic caused by Covid-19.

Currently, the great challenge for Brazil and countries in general is to adapt and regulate employment contracts to this extreme situation caused by the pandemic and guarantee employment and the functionality of companies in accordance with the principles consolidated in the Federal Constitution.

Article 3 of Provisional Measure 927/2020 introduced various labor measures aimed at preserving workers’ jobs and income as a result of the state of calamity decreed by the federal government and the Sars-Cov-2 pandemic:

“Art. 3 In order to cope with the economic effects of the state of public calamity and to preserve employment and income, employers may adopt the following measures, among others:

I – teleworking;

II – the anticipation of individual vacations;

III – the granting of collective vacations;

IV – the use and anticipation of public holidays;

V – the bank of hours;

VI – the suspension of administrative requirements in occupational health and safety;

VII – directing workers to qualifications; and

VIII – deferral of payment of the Severance Indemnity Fund – FGTS”.

Article 19 of the Provisional Measure stipulates that the requirement for employers to pay the FGTS is suspended for March, April and May 2020, with the due date being April, May and June 2020.

The sole paragraph of article 19 also states that companies will be able to make use of this prerogative regardless of the number of employees, the tax regime, their legal nature, the branch of economic activity and prior adherence.

The Provisional Measure also states that FGTS contributions for March, April and May 2020 may be paid in installments, without the incidence of updates, fines and charges provided for in Law No. 8.036/90.

However, any default on the FGTS installments will subject the employer to the payment of a fine and additional charges, in addition to causing the FGTS certificate of good standing to be blocked. Certificates of good standing issued prior to the date of entry into force of the Provisional Measure on the Guarantee Fund will be extended for 90 days.

On the other hand, the installment payment of FGTS debts in progress, with installments due in March, April and May, will not prevent the issuance of the FGTS certificate of good standing, under the terms of article 25, sole paragraph of the Provisional Measure.

The statute of limitations for FGTS contributions will be suspended for one hundred and twenty days from the effective date of Provisional Measure 927/2020.

With regard to procedural deadlines and the filing of defenses and administrative appeals in the context of labor infraction notices and FGTS debt notifications, they will be suspended for one hundred and eighty days. However, during the same period, the Labor Inspectors and the Ministry of Economy will not be able to collect FGTS contributions.

Finally, another measure to protect workers laid down in Provisional Measure 927 is that in the event of termination of the employment contract, the suspension of the payment of FGTS contributions will no longer apply and the employer will be obliged to pay the corresponding amounts, without incurring fines and charges. Furthermore, the 40% deposit will be due in cases of unfair dismissal and 20% in cases of mutual fault.

Finally, it should be noted that Marcos Martins Advogados is attentive and up-to-date with regard to changes in legislation as a result of the pandemic, and is available to help companies adopt strategic and targeted solutions.