WE HAVE A NEW LEGISLATION FOR THE WORK REGULATIONS IN BRAZIL.

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2 WE HAVE A NEW LEGISLATION FOR THE WORK REGULATIONS IN BRAZIL. Law number /2017 modifies CLT (Consolidation of Brazilian Labor Laws). After many controversies and protests, the current government has managed to approve the amendments that entered into force on November 11, It is a new fact, but it is urgent to have full knowledge of what has effectively changed.

3 IN ACCORDANCE WITH THE GOVERNMENT, THE IDEA IS TO MAKE LEGISLATION MORE FLEXIBLE, CORRECT DISTORTIONS AND FACILITATE HIRING PROCESSES. The new Labor Legislation changes the rules for work hours, vacation, outsourcing, among other issues. It also regulates working arrangements that were not contemplated before by CLT, such as home office (remote work) and intermittent employment.

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5 VACATION WORK HOURS UNION HOME DISMISSAL CONTRIBUTION OFFICE REST NEGOTIATION BANK OF OUTSOURCING HOURS INTERMITTENT CONTRACT TRAVEL TIME FROM HOME PARTIAL WORK REMUNERATION

6 VACATION 30 day After one full working year, the divided vacation period could be into 2, under the condition that one of 20 days. them could not be inferior to Now the vacation period can be divided into 3 periods, up to providing one of them 15 consecutive days. has at least Employee and Employer can discuss how to do it.

7 WORK HOURS (12X36) 8 hours Maximum work hours were per day; 44 hours weekly and 220 hours monthly. 12 hour It will be allowed a journey on a single 36 hour working day followed by a rest period for all employment categories, provided that there is an agreement between employer and employee. Employers and Employees can negotiate in various ways the work hours, provided that the constitutional and the specific legislation (Collective Labor Agreements) limits are respected.

8 UNION CONTRIBUTION mandatory. Contribution was Payment was made day s once a year, through a discount equivalent to a salary of the employee. Union Contribution becomes optional.

9 HOME OFFICE There was no provision in the legislation. Work control is made through tasks. Equipment, expenses with energy and internet, and all that the uses at home to provide employee services will be formalized by the employer via a written agreement.

10 DISMISSAL The fine paid by the company used to be 40% of the FGTS balance. The employee could withdraw 100% of the paid in FGTS, in cases of unfair dismissal. The employer would give an indemnified 30 day prior notice. When the employee resigned, he did not have the right to receive the FGTS or apply to unemployment benefit. In case of Dismissal of an employee with over one year of hiring, the homologation by the Union of the employee s labor category was mandatory. The Dismissal may happen by mutual agreement. The fine paid by the company is 20% of the FGTS balance. The employee may withdraw 80% of the paid in FGTS. The employer may give a 15 day prior notice to employees or indemnify them, but the employee is not entitled to unemployment benefit. There is no more need to homologate the Employment Termination Agreement at the Labor Union or Public Prosecutor s Office.

11 REST 8 hour journey minimum work An employee was entitled to a break of 1 or 2 hours to rest or have a meal. Minimum time for a work break is 30 minutes. Based on this guideline, the issue can be discussed between the parties. If the employer does not allow a minimum break for a meal or indemnification will be of partially allows it, the only 50% of the value of a normal working hour over the not allowed time instead of over the whole overdue break.

12 NEGOTIATION Conventions and Collective Bargain Agreements between companies and labor unions only stablished working conditions different from what was provisioned by Law when they granted to the employee a level higher than expected. Conventions and Collective Bargain Agreements can prevail over unions and companies legislation. This means that labor may negotiate work conditions that are different from what is foreseen by law, and they can consider any level for the employee.

13 WHAT IS NEGOTIABLE WHAT IS NON- NEGOTIABLE Work hours Profit share Bank of hours Exchange of the date of a holiday Work break The right to Unemployment Benefit Minimum Wages 13th Salary Annual Vacation Maternity/Paternity Leaves

14 BANK OF HOURS Overtime hours could be compensated provided that, within one year, the sum of those hours did not exceed the foreseen labor weekly hours. There was also a limit of 10 hours per day. Bank of hours was a negotiation that would happen between the company and the Unions. Employer and employee will negotiate individually the bank of hours and formalize it in writing. What becomes mandatory is that such compensation must take place within a maximum period of 6 months.

15 OUTSOURCING outsourcing for endactivities has The bill that allows passed. same work The outsourced staff has the conditions permanent than the worker, like in-house medical care, meals, safety, transport, training and quality of equipment. dismiss the Should the company permanent employee to hire him or her outsourced staff, a quarantine as period of 18 months must be respected.

16 INTERMITTENT CONTRACT The Consolidation of the Labor Laws (CLT) did not regulate the intermittent work. The employee receives for the period for which the services were provided and can be hired to work sporadically. The intermittent contract does not define a minimum hourly load. The employee may be hired to work two hours per week or per month. The contract foresees that the employee may be summoned with at least three days prior notice, by means of any effective communication means (telephone, Whatsapp, Messenger, provided that the person makes use of these means). Like for the other employees, at every twelve worked months the employee is entitled to enjoy, in the 12 subsequent months, one month vacation.

17 TRAVEL TIME BETWEEN WORK AND HOME In cases of difficult access, the time spent for traveling was considered to be work time and computed into work hours. not considered The time spent is work time and will not be computed into work hours.

18 PART-TIME WORK The Consolidation allowed for a working week of up to 25 hours without overtime. 30 hours This working week can be of up without overtime. Another possibility is a working week of 26 hours, with the addition of up to 6 hours overtime.

19 REMUNERATION The payment of a professional could not be inferior to the established base salary to his or her work class or based on the minimum wage. Aids, awards and bonuses were recognized by Justice as elements of pay and counted on the severance pay. pay a minimum There is no obligation to wage or an established base salary. not Benefits, awards and bonuses do enter in the sum of severance pay and labor and social security charges on these values cannot be required.

20 The changes promote More flexibility on the modalities of hiring and dismissal; More power for the negotiation between the Union and the Company, which can prevail over CLT; A more modern legislation.

21 São Paulo: Porto Alegre: Miami: Material updated in February, 2018.