The FGTS is a contribution payed by employers to finance the Fundo de Garantia sobre Tempo de Serviço, which can be translated as a Public Guarantee Fund to workers to be used in exceptional cases, such as the firing of an employee. According to Provisional Measure No. 927 of March 22, 2020 (accessible here), it is suspended the collection of FGTS by employers regarding the competencies of March, April and May 2020, which will not depend on: (i) the number of employees, (ii) the tax regime, (iii) the legal nature, (iv) the branch of economic activity, and (v) prior membership.
The collection of the suspended FGTS payments will be carried out in up to 6 monthly installments, without the incidence of interests, fines and charges, starting in July 2020.
In order to use the benefit, the employer will be obliged to declare, by June 20, 2020, the information provided by law, which will constitute recognition of debit confession.
Furthermore, undeclared amounts will be considered in arrears and will require full payment of the fine and charges due.
In the event of termination of the employment contract, the suspension of the collection of the FGTS will be resolved and the employer will be obliged to collect the corresponding amounts, without the incidence of the fine and the charges due.
The counting of the limitation period of the debts related to FGTS contributions is also suspended for a period of 120 days, counted from the date of entry into force of MP No. 927/2020.