Digitalization of Documents

New Legislation Enacted

On September 20, 2019, Law 13.874/2019 was enacted and is already in effect. This law, known as the Economic Freedom Act, modifies a few bodies of law, including Law 12.682/2012 that specifically sets procedures to create and store documents in electronic format. Under the new rules, after documents have been digitized and once the integrity of the digital document has been verified, the original may be destroyed (except for documents of historical value) and, after the respective statutes of limitation have run, they can be deleted. This may resolve once and for all the question of whether wet-ink original HR documents must be kept indefinitely.

Brazilian Employee Booklet Goes Digital

New Legislation Enacted

Under a new law, known as the Economic Freedom Act (Law 13.874/2019), which was enacted on September 20, 2019, and is already in effect, all employees in Brazil must have an employee booklet (CTPS), which includes employee’s personal information and employment history. Additionally, the new law introduced several changes to the format, content, and required updates of the CTPS. Among other changes, the new CTPS will be issued only electronically (except in some circumstances) and will display only the employee’s taxpayer identification number and no other types of identification. Employers will have five business days to update the CTPSs (up from the former 48-hour requirement), and the updates will eventually be made electronically.

Control of Working Hours

New Legislation Enacted

Under the new Economic Freedom Act (Law 13.874/2019), which was enacted on September 20, 2019, and is already in effect, employers will no longer need to have the working hours posted in a bulletin board. Such information must be incorporated into the employees’ registry. Mandatory control of working hours, which was applicable to employers with more than 10 employees, now applies only to those with more than 20 employees. The new law also allows timekeeping “per exception,” meaning that only overtime is recorded, provided that there is an individual or collective agreement in place.

TST Rules in Favor of Full Release

Precedential Decision by Judiciary or Regulatory Agency

On September 11, 2019, the Fourth Tribunal of the Superior Labor Court (TST), the highest labor court in Brazil, unanimously ruled that if the legal requirements are met, it is not possible to question the will of the parties involved and the merit of their agreement. Therefore, with the mandatory representation by counsel of the employee during the proceedings, the parties’ private settlement with general and unrestricted release of claims must be deemed valid and ratified by the court.

eSocial: Electronic Reporting to Be Simplified

New Regulation or Official Guidance

Technical Note # 15/2019 (as amended) has brought several modifications to eSocial's layout (version 2.5), the electronic reporting system for employers. The main change was the conversion of some fields from "mandatory" to "optional," such as, for example, the field related to admission's documents (event # S-2200), which no longer needs to be filled out. Additionally, several events have been dismissed, such as event # S-1300 (employer's union fees). Under the new Law 13.874/2019, eSocial will be replaced by a simplified version and layout, which will determine how and which information must be reported into the national system, as well as the timeline for the replacement/elimination of several obligations. In the meantime, employers are required to continue using the current system, as applicable to its revenue/tax band.