[Brazil] Constitutional amendment reducing standard workweek to 40 hours approved

On October 14 in Brazil, Congress approved Constitutional Amendment Bill No. 221/2019 (known as ‘PEC 6×1’) which reduces the country’s standard maximum workweek from 44 to 40 hours and increases the number of weekly paid days off (descanso semanal remunerado, or DSR) from one to two, Mattos Filho reports.

The final version of PEC 6×1 is identical to the version previously approved in the House of Representatives. 

It is reportedly expected to have financial implications for all companies operating in Brazil, including those already operating on a 40-hour workweek, and creates legal uncertainty around issues such as time banks, 12-hour on/36-hour off shift schedules, and collective bargaining. 

The amendment will take effect in three stages. Mattos Filho urges companies to pay close attention to the timeline: 

Immediate effects (upon publication)

Employees with a university degree and monthly compensation of BRL 21,188.87 or above may be exempted from the working-hour controls. 

60 days after the amendment is published

Employees become entitled to a second weekly paid day off; the maximum workweek drops to 42 hours; hours worked in excess of 40 per week may be offset through collective bargaining; the provisions of collective bargaining agreements and conventions on working hours and rest periods that are incompatible with the amendment will become null and void; and, as a rule, any work schedule other than the 5-day on/2-day off model must be established through collective bargaining, within the limits that the amendment sets. 

14 months after the amendment is published

The maximum workweek drops to 40 hours, marking the end of the transition period. 

The constitutional amendment states that working hours will be reduced without any reduction in employees’ pay. A stricter interpretation of the new rule reportedly suggests it could mean: 

• Higher monthly pay for salaried employees (an increase of approximately 10 per cent)

• A significant increase in the cost of the DSR for commissioned employees and of the DSR on regular overtime, potentially affecting even companies that already operate on a 40-hour workweek. In addition, this higher cost would flow through to other amounts that factor into the DSR calculation for commissions, such as vacation pay and the thirteenth annual salary payment

• A higher rate for employees paid by the hour, which would increase the base for calculating overtime and other premiums. 

Source: Mattos Filho

On October 14 in Brazil, Congress approved Constitutional Amendment Bill No. 221/2019 (known as ‘PEC 6×1’) which reduces the country’s standard maximum workweek from 44 to 40 hours and increases the number of weekly paid days off (descanso semanal remunerado, or DSR) from one to two, Mattos Filho reports.

The final version of PEC 6×1 is identical to the version previously approved in the House of Representatives. 

It is reportedly expected to have financial implications for all companies operating in Brazil, including those already operating on a 40-hour workweek, and creates legal uncertainty around issues such as time banks, 12-hour on/36-hour off shift schedules, and collective bargaining. 

The amendment will take effect in three stages. Mattos Filho urges companies to pay close attention to the timeline: 

Immediate effects (upon publication)

Employees with a university degree and monthly compensation of BRL 21,188.87 or above may be exempted from the working-hour controls. 

60 days after the amendment is published

Employees become entitled to a second weekly paid day off; the maximum workweek drops to 42 hours; hours worked in excess of 40 per week may be offset through collective bargaining; the provisions of collective bargaining agreements and conventions on working hours and rest periods that are incompatible with the amendment will become null and void; and, as a rule, any work schedule other than the 5-day on/2-day off model must be established through collective bargaining, within the limits that the amendment sets. 

14 months after the amendment is published

The maximum workweek drops to 40 hours, marking the end of the transition period. 

The constitutional amendment states that working hours will be reduced without any reduction in employees’ pay. A stricter interpretation of the new rule reportedly suggests it could mean: 

• Higher monthly pay for salaried employees (an increase of approximately 10 per cent)

• A significant increase in the cost of the DSR for commissioned employees and of the DSR on regular overtime, potentially affecting even companies that already operate on a 40-hour workweek. In addition, this higher cost would flow through to other amounts that factor into the DSR calculation for commissions, such as vacation pay and the thirteenth annual salary payment

• A higher rate for employees paid by the hour, which would increase the base for calculating overtime and other premiums. 

Source: Mattos Filho