Brazil continues to streamline employer submissions of required employment data by integrating more workplace reporting requirements into the eSocial system. Coming on the heels of the Economic Freedom Act (Law 13.874/2019), which contains several provisions to consolidate and digitize employment information, two recent ordinances provide employers an easier process to submit employment data to the government. One ordinance applies to reporting requirements for the RAIS and CAGED systems,1 and another addresses digitizing the Employee Registration Book. Most of the provisions within these ordinances take effect on January 1, 2020.
The eSocial platform aims to reduce employer paperwork and redundant filing requirements for four large agencies: the Internal Revenue Service, the Social Security Institute, the Economy Ministry,2 and the government bank that manages national employee savings funds FGTS. The government’s eSocial website recently reported that over 5.7 million employers are using the system, representing nearly 40 million workers registered on the platform.
Ordinance No. 1,127
Ordinance No. 1,127, issued on October 15, 2019, allows employers to submit data previously reported to the RAIS and CAGED registries directly into the eSocial system. CAGED is the government registry to which employers report hiring and dismissal information, starting salary, termination dates and final salary, and employee transfers. RAIS is the registry for the annual reporting of social security information such as date of birth, monthly salary payments and date and reason for termination. Under the new ordinance, most companies will soon be able to submit employment statistics and personnel information digitally through the eSocial platform, which should simplify reporting requirements by eliminating most paper documentation. In addition, employers will only be required to enter information once, reducing redundant filings and potential inconsistencies.
While larger companies will experience reduced filing burdens beginning in January, employers that do not use eSocial will not be able to take advantage of the digital filing option. For CAGED information, government and international entities are not currently obligated to use eSocial data entry, so those bodies will need to continue filing as in the past. Data for RAIS submissions will be submitted as in the past for small or micro companies, farmers, and non-profits as well as international or government entities. Any company opting to use the Simples Nacional tax payment structure will also need to continue to file RAIS submissions separately. For all other private employers that used the eSocial during the entire 2019, RAIS information will have to be provided through the eSocial system.
Ordinance No. 1,195
Two weeks later, on October 30, 2019, Brazil’s government issued Ordinance No. 1,195, replacing the Employee Registration booklet (“CTPS”) with eSocial filing. The booklet is a physical document similar to a passport, except it tracks employees’ work history, personal data, and pay records. There are many obligations for employers to track relevant data for the booklet, which has historically been kept at the employee’s place of employment. Integrating the employee registration filings into the eSocial platform will digitize this information and, in essence, add another use for the platform. Employers not using eSocial must still fulfill their filing requirements as in the past and will have one year to adapt their documentation to the new format required under the Ordinance.
The ordinance enumerates timelines for various types of data to be entered into eSocial. The breakdown for data entry deadlines is:
- On the day before a new hire’s start date: taxpayer identification number (CPF) (CTPS and PIS #s will no longer be used), date of birth, job category, classification of occupation, salary, and type of employment contract;
- By the 15th of the month after an employee’s start date: name, gender, education, address, nationality, position title, any variable salary, dependents, working hours, training, and relevant disability information and applicability to the non-profit apprentice quota;
- By the 15th of the month after the occurrence: employee’s contract changes, vacation or leave time is taken, or an employee is transferred or terminated; and
- By the 16th day after an absence: if an employee is away from work for longer than 15 days due to injury or illness, or if an employee is absent twice within 60 days for the same illness or injury.
Reporting timelines related to accidents or occupational illnesses are set out separately. Employers are obligated to immediately report any work-related accident or occupational disease that results in death. They must also immediately report any leave resulting from a work-related accident or illness if it reoccurs within 60 days of previous leave for the same reason and the employee received sick pay for the previous leave. The ordinance also provides that employers have until the first work day following a work accident or occupational disease that does not result in death to enter required information. If an employee is terminated for any reason that might allow them to withdraw from the severance indemnity fund, or FGTS, this information must be logged by the 10th day following the termination.
With the new changes to the CTPS, the following provisions from the Labor Code were deleted: Art 13, § 3 and 4; art 16, items I to IV and sole paragraph; art 17; art 20; art 21; art 25; art 26; arts 30 thru 34; art 40, item II; art 53; art 54; art 56; art 141; art 145, sole paragraph; art 417; art 419; arts 420 thru 422; and art 63. Also, the following ordinances have been revoked: MTIC Ordinance # 576 of Jan 6, 1941; MTE Ordinance # 589 of April 28, 2014; and art 6 of the MTE Ordinance # 1.129 of July 23, 2014.
These ordinances require an evolving approach for managers and human resources professionals in Brazil to track and manage employment data.