New eSocial System Implemented
Upcoming Deadline for Legal Compliance
As of July 16, 2018, small- and medium-sized companies are required to use the eSocial reporting system implemented by large companies earlier this year. Digital Bookkeeping of Fiscal/Tax, Social Security and Labor Obligations (“eSocial”) is a Brazilian federal government project to unify an employer's transmission of employment- and work-related data to various federal government institutions. Implementation is challenging because many companies lack the necessary internal structure to accommodate the magnitude of the project. Companies will have until August 31, 2018 to submit a series of forms as part of Phase 1 of the implementation process. Non-compliance will be penalized.