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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