BRASÍLIA – The Chamber of Deputies approved, in a symbolic vote, the basic text of the Provisional Measure 936 which allows agreements for suspension of contract or reduction of working hours and wages in the crisis of the new coronavirus and payment of Emergency Employment and Income Preservation Benefit for workers who were hit with one of the two modalities.

Despite being symbolic, all parties submitted “yes” in the election. The voting process, however, has not yet been completed and MEPs will now vote on suggestions for changes to the proposal. The objective of the initiative is to preserve jobs and help firms to face the crisis caused by the coronavirus pandemic.

According to official data, more than 8.2 million formal workers have had their contracts suspended or wages reduced because of the pandemic. The government estimate is that 73% of employees with a formal contract will be affected by one of the two measures.

To complete the vote, deputies still need to analyze suggestions for changes in the text. After being approved in the Chamber, the provisional measure goes to the Senate for analysis.

The MP has been in force since the beginning of April, when it was published by President Jair Bolsonaro. However, in order not to lose its validity, it must be approved within 120 days by the National Congress.

The rapporteur changed the formula for calculating the value of the benefit, which is based on the average wages for the last three months prior to the agreement for the suspension of employment contracts and the workday with a ceiling of three minimum wages (R $ 3,135In practice, those who earn up to three minimum wages would be guaranteed a full replacement by the federal government. Workers who earn more than that would have the benefit calculated under this new ceiling of R $ 3,135, that is, they would also receive a larger portion of the benefit.

With the support of Centrão, the government was able to revert and maintain the original calculation base, the maximum benefit of which was set at R $ 1,813.03, equivalent to the unemployment insurance ceiling to which the employee would be entitled if he were dismissed. The highlight (suggestion to change the base text) that recovered the MP calculation was approved by 315 votes in favor against 155 against.

The government acted against this change because of the cost of this measure: an extra R $ 23 billion would be needed. The program has already spent an estimated R $ 51.2 billion.

The opinion of Orlando Silva (PCdoB-SP) authorizes the extension of the maximum term of the measures, at the discretion of the Executive Branch, for the reduction of working hours and for the suspension of the contract. Therefore, the expectation of the business sector is that the extension will be made.

The basic text of Silva’s report was praised by parliamentarians from different political currents. The government leader, Major Vitor Hugo (PSL-GO), said that “the structural logic of the text was maintained” and the rapporteur made an effort to, without abandoning his flags, listen to the government’s arguments.

Payroll exemption

The MP was approved with an extension for another year of the exemption from the payroll for 17 sectors. Among the sectors that still benefit from the reduction in payroll are call centers, information technology, civil construction, footwear, the textile industry and communication.

The exemption, from the time of the Dilma Rousseff government, would end at the end of this year. After a negotiation in the plenary, the MP’s rapporteur, deputy Orlando Silva, reduced the extension of the exemption from two to one. O annual cost is R $ 10.2 billion.

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