segunda-feira, 20 de julho de 2009

Recently Published Law Creates Benefits to Professionals Transferred to Foreign Countries

From São Paulo-SP, Brazil.

Early last week Law number 11,962, issued July 3rd 2009, was published in the Brazilian official press, amending article 1 of Law number 7,604, issued December 6th 1982, and is now applicable to companies in Brazil.

Professionals working on all economic sectors, no exceptions, hired on or transferred to a foreign country are now subjected to the terms of the 1982 Law. Up to date, those rules were enforceable only to workers of companies providing engineering services.

According to Professor Paulo Blair, teaching constitutional rights at the UNB (University of Brasilia), a law protecting workers transferred to a foreign country has always existed, but only in theory. In practice, not even the engineering services providers, which according to the terms of Law number 7,604 were mandated to comply, were respecting the legislation in place.

"Up to date, in the majority of the cases, the law was simply ignored, what resulted in a significant number of legal claims. The new law, issued this week, comes to correct that situation” explains him.

Export of inexpensive manpower

According to Prof. Blair, companies needed specialized, experienced and knowledge professionals to hire, but wanted to do that with a low cost and it happens that in foreign countries those professionals tended to have higher salaries than in Brazil.

The Brazilian legislation protects Brazilian workers sent to live and work in countries where the cost of living is frequently higher than in Brazil, what is a “wonderful thing”, on Prof. Blair’s opinion. "Why would someone go live abroad in a worst condition than it had in Brazil?” he questions. "We don’t want to be a country that exploit talents paying peanuts, generating wealth else where. We don’t want to be inexpensive manpower exporter”, he adds.

Understand what says the new law:

The law reaches every professional whose assignment abroad will last for more than 90 days, and whenever one of the following conditions apply:

* The worker is transferred to a company based outside Brazil, remaining employed by the Brazilian employer; or

* The worker is moved to a foreign country based on a contract being executed in the Brazilian territory; or

* The worker is hired by a company operating in Brazil but will be assigned by that employer to work on a foreign country.

More favorable legislation

According to Law number 11,962, the company holding the employment contract with the employee transferred abroad, should assure the Brazilian labor legislation will be applied in all aspects that do not contradicts the law of the country to where the employee is being transferred provided it is more favorable than the territorial legislation. In other words, the Brazilian rules that protect workers should apply whenever those rules are more favorable to the employee than the legislation of the country to where the employee was transferred.

Social Security

The professional will be entitled to the Brazilian Social Security benefits, to the FGTS – Fundo de Garantia do Trabalhador (individual accounts where the employer credits monthly contributions of 8% of the salary in behalf of the employee) and to the PIS/Pasep (a social program).

One should notice that during the time the employee is working abroad, some social charges won’t need to be paid by the company such as “Salário-Educação” (education-salary), SESI-SESC-SENAC-SENAI (a series of social charges).

Salary and Vacations

When it comes to salary, the new law states that it should be subjected to the same mandatory readjustments (inflation) and increases (productivity) mandated by the Brazilian labor legislation, it also states that those readjustments and increases will be applied solely over amounts converted to the Brazilian currency, and that the transferred employee salary cannot be lower than the minimum established by the union of the employee’s professional category.

Besides that, the base-salary registered in the employment contract need necessarily to be established in Brazilian currency, but the compensation granted to the employee during the transfer period can be paid to the employee in foreign currency.

In regard to vacations, the text of the law says that after two years working abroad the employee will be annually entitled to vacations in Brazil (home leave). Travel expenses will be paid by the employer in Brazil or by the company to where the employee was transferred, and such expenses are extensive to all family members living with the employee.

Return to home country

The professional will be guaranteed a return to Brazil when:

1. The employee completes three years working abroad;

2. The employee needs to return to Brazil due to any serious problem happening with his/her family, required the seriousness of the problem be proved by the employee;

3. Due to health problems provided an official doctor’s reports be presented;

4. For a just cause in order to have the contract resigned by the company;

5. The employee service abroad comes to be no longer needed or convenient to the company.

When the employee is the one requesting the employment termination or if the employee is dismissed by the company due to a “just cause”, all expenses related to his/her return to Brazil will be paid by the employee himself.

Companies are required to provide the transferred employee with insurance coverage for accidental death and a life insurance during the period between the departure of the employee to the foreign country and his\her arrival back to Brazil. The insured capital cannot be lower to the equivalent of 12 times the employees’ monthly compensation.

Last but not least, companies are also required to provide the transferred employee, free of charge, reasonable health and social services in the foreign working place or in any place close to that location.

Final recommendation

It is highly recommended that your company consult with legal advisors to verify if the new legislation will impact your company’s expatriation policy.


Cheers!

Eder.

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