New household help laws

So if you haven't heard, the empregada unions have won the right to FGTS. FGTS is a tax that is paid by all employers (up until now, this was not a legal requirement for household help) and is essentially a redundancy pay out. I'm torn over the idea of this being a good or a bad thing for Brazil. If the idea is to move domestic employees into better paying jobs then there needs to be the support in place first before it happens. Training, education, job search agencies, a waiting period instead of changing overnight... There is an estimated 850,000 maids that will be fired because of this new law as families can't afford the rising costs. I'm going to let go of our weekly ironing lady - essentially the money that I pay her would be of more value in extra-hours for my full time empregada. I've come from 2 different backgrounds - growing up in New Zealand where my mother was a full-time mother who gave up her job to look after me and my sisters, to the second part of my life where we had a live-in filipino maid in Hong Kong. I wouldn't call either of these developing countries, so then the argument for Brazil's progress is redundant.

AND after attending the fantastic Women Changing Brazil Symposium the other week, I get my back up because I really want to set up a business here. I'm now trying to wrap my head around how our monthly expenditures are going to shoot through the roof as I try and juggle the children's schedules, keep track of our empregada's working hours, and bake cupcakes all day ; ).

The below information is from Patricia de Luna (our famous lawyer-dentist at the INC) who runs the course on domestic employment for the International Newcomer's Group of Sao Paulo. I blogged here about her presentation on household help last year. You must be a member to join her presentation which will be later this month once the law comes into effect (tomorrow). I would highly recommend becoming an INC member, if anything to have access to this knowledge base. She has kindly given me permission to copy over some of the information below she has been posting on the INC Facebook page (again, you need to be a member), as well as some answers to questions I had at the bottom. If you can't make the workshop at the end of the month (date to be confirmed), I will be blogging about it of course!

* Here is an online calculator to work out how much more you will be spending
** Reuters article on law change
*** More information from Folha, though in portuguese

****EMPREGADA LAW UPDATE****

TODAY, the Brazilian Senate approved the Constitutional Amendment that grants additional labor rights for domestic employees. It is is expected to be promulgated next Tuesday, April 2nd in a session of both houses of Congress.

The new legislation will take effect on that date for all domestic employees. However, some of the rights granted by the new legislation will require regulation and will not take effect immediately.

What rights are expected to be effective immediately?
- Domestic employees may not earn less than minimum wage;
- Salary protection (it is a crime to retain payment);
- Work hours limited to 8 hours per day, and 44 hours per week;
- Overtime pay (50%);
- Legal recognition of collective agreements;
- Reduction of labor risks;
- Differences in salary, tasks and admission criteria based on sex, age, color or marital status are prohibited.
- Discrimination of disabled employees is prohibited.
- Minors under 18 may not work at night or in circumstances that offer danger or health risks. Minors under 16 may not be employed.

What rights are expected to require regulation?
- FGTS
- Compensation in case of unfair dismissal;
- Unemployment insurance and family allowance, to be paid for by the government;
- Additional pay for work after 10pm;
- Daycare assistance;
- Insurance against accidents in the work environment.

No predictions have been made regarding when laws regulating these rights will pass.

How this new legislation will affect employment relations is still unknown and a number of questions have not been answered, including…
- How should you control and document work hours in your home?
- Will overtime pay and additional pay for work at night apply to employees who live in your home?

Please note that these changes are not applicable to independent daily workers, such as faxineiras.

For now, that’s all the information we have. INC is planning a workshop soon, and we will have more information.

Patricia de Luna

1 April 18:30

NEWCOMERS WITH EMPREGADAS: PLEASE READ THIS NOTE!

The new law for domestic maids (registered empregadas) will take effect tomorrow.

If you have not done so yet, sit with your maids and revisit their working hours to make sure you are both clear on what those times will be. Beginning tomorrow, work hours are limited to 8 hours per day (plus one hour for lunch, mandatory) and a total of 44 hours per week. It is recommended ( but not mandatory) that you document these hours, either with a simple spreadsheet or by using a "Livro de Ponto" which can be purchased at any office supply store (including Kalunga). The maid should, in her own handwriting, write down what time she arrived, what time she stopped for lunch, what time she came back from lunch and what time she left work and sign it every day. If you do decide to document these hours, please make sure it is documented to the exact minute. A document showing that an employee began work every single day precisely at 8:00am, had lunch precisely from 12pm to 1pm and left precisely at 5pm will appear to be phony.

It is not clear yet whether the 4 hours on Saturdays can be carried over to the weekdays without union approval - we should have more information soon.

At the end of each month, you will need to check how many hours were worked and overtime must be paid with an additional 50%.

It does not look like FGTS will be a concern just yet. It will officially become a mandatory right tomorrow, but will most likely require an additional law to regulate it. If you do not pay FGTS yet, my recommendation is that you do not begin to do so before it is regulated.

If you feel that the cost of having an empregada may be of concern, there is an online cost calculator (see link below) that you can use to estimate what your monthly cost will be. Please note that it is only an estimate, does not include all of the details outlined in the new law and costs may vary.

WHAT IF I WANT TO FIRE MY MAID:
If you are considering firing your maid, this is the time to do so.

CAN I FIRE MY MAID AND REHIRE HER FOR A LOWER SALARY?
No; to do so is illegal.

CAN I FIRE MY MAID AND CONTINUE TO USE HER AS A FAXINEIRA (DAILY CLEANER):
There is no legal impediment. However, it may leave room for doubt as to whether the employment relationship continued (ie: fraud) so please consider this with care.

SO WHEN IS THE INC WORKSHOP???
We are waiting for the law to be signed tomorrow and for certain rules to be made clear, so that we may provide you with the most accurate information possible. We expect to have the workshop in late April so watch for the weekly emails from INC!

Some other related information:

Does it still count as time and a half if they are sleeping?

   * No; you will only count the time that is being worked.

Can we carry over hours from week to week?

   * In theory yes. However, it is still not clear whether this will require going through a union to do so, as is the case with other employees.

What if she needs time off for sick child or to go to doctor, do we count hours she has not worked?

    * If she brings proof of her consultation or hospital visit, her absence is justified and those hours cannot be deducted.

Do we add up all extra hours and pay at end of month?

    * Yes - and do document this as such.

Do we pay inss and fgts on total salary including overtime or is just for their base monthly salary?

     * It will be owed on the full amount.

Does she contribute any % to fgts?

     * No - that will be yours to pay. It looks like it will be 8% and it looks like this will not take effect immediatly (it requires regulation by another law), though the empregada union argues differently. Will wait to see how that works out.

Does the employer pay fgts starting month of april? I.e should be included in inss tax book and paid by may 15th for april?

    * See question above. However, the FGTS is not added to the INSS. 

Hiring a maid in Sao Paulo

The other week I was able to attend a seminar on Household Help, organised by the International Newcomer's Club. It's run by Patricia de Luna, who is one of those people you are secretly jealous of and admire at the same time - she's a lawyer for fun, a dentist by day and takes upon herself the publishing of the Dicas (a very useful book of tips published by the INC every other year). She organises this seminar as hiring household help is full of legal minefields - everyone always has a story of a friend of a friend being sued. All sounds pretty stressful!! I've avoided any potential pitfalls by doing everything according to the law - the problem is working out what that law is! Some people employ agencies to do this for them which is certainly not stress-free either, and also very expensive.

The history of slaves in Brazil is extensive and sad. Brazil had the largest slave population in the world. In 1888 it was decreed illegal and the slaves were set free.. but most of them didn't have anywhere to go, so continued to live on the farms and were paid in board, food and money. When the laws for employment came into being it focused on the idea that the employee is always the disadvantaged party - and these are the same laws that are still in place today. It is important to take this into account when looking at some of the laws in today's eyes that might seem unfair (being the employer).

The one thing I really took to heart was Patricia talking about salaries. It is normal that expats pay above the going rate (an exceptional empregada is paid R2000 a month, and I heard of someone paying their driver R6000 a month! I would be their driver if I could drive : ) ..... some because they don't know any better, or others that really want to help someone out.

The problem is that expats are always going to leave, and leave behind someone who is a good worker but wants above the going rate. They will find it difficult to find a job that they are happy with. I paid my last baba (nanny) R900 per month for 4 (easy) days of work. She left us in December and still hasn't found a job even though she has been offered numerous jobs. I get a call or text from her every week.... that job was working too much, this salary was too low, she doesn't want to stay overnight, she doesn't want to work in this area, she doesn't want to iron... It's such a different mindset from mine - if I was out of a job, I would take any job just to make means until something better (even if it is ironing!!).

Here are some points from Patricia's seminar that I wrote down:

1. The employee be registered from Day 1 of work and the trial period of up to 90 days can be written in the carteira da trabalha. 
2. Salary must be paid by the 5th of the following month.
3. The employer needs to pay INSS which is 20% (8% can be taken out of the employee's salary)
4. Travel costs must be subsidised.
5. A trial period can be up to 90 days where neither party needs to give notice. After this it is 30 days notice. 3 days per year worked is accumulated up to 90 days max notice that has to be given.
6. The employer can only keep the carteria for up to 48 hours and after this time it must be returned to the employee.
7. For up-to-date salaries use datafolha (which is updated every month).
8. Annual raise is not mandatory.
9. There are no set work hours, and no overtime pay but the average is 44 hours per week.
10. If you go to Caixa (the bank) to pay the INSS (which needs to be paid by the 15th of the following month) they will work out any fines due. Best is to make sure you pay before the 15th. You can also pay online via your bank account, or at a Loteria.
11. The employee receives 13th month  and 1 month salaried holiday (only available to the employee after one year, and at 1.33%, which is received before they go on holiday).
12. Holidays can't be shorter than 10 days at one time, and the employee can sell back up to 10 days to the employer. The employer can dictate when the employee goes on holiday.
13. When you pro-rate, always divide by 30 days, 52 weeks or 12 months - don't count the actual working days.
14. If the employee is pregnant she is guaranteed job stability from confirmation of pregnancy (this is the date she finds out, she is not obligated to tell the employer but I'm sure the employer would work it out eventually...) until 5 months after the delivery date.