Following the introduction of Brazil's job protection plan, which makes it easier for companies in financial difficulties to cut employee salaries and working hours, local counsel say a lack of clarity in the new rules will prevent many companies from applying for the new legislation.

On Thursday 22 July Brazil's Protection Programme Employment Committee (PCAP) published the criteria by which companies qualify for the programme. The temporary provision, which was signed by President Dilma Rousseff on 6 July, allows struggling companies to reduce the salaries and the working hours of its employees by up to 30 per cent, with the government subsidising up to half of the amount by which salaries are reduced. All cuts have to be applied equally to all of employees within the same department or team.

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