nueva seguridad social Brasil

The scenario with the new Social Security in Brazil

What benefits does the reform have? Why is it relevant to have a labor consultancy in a time of change? We analyze this and more together with Marco Seriacopi, Partner of Englobally Brazil, with 29 years of experience in business accounting.

new Social Security in Brazil

With the reform of the pension system, what legal aspects should a foreign company that wants to settle in Brazil take into consideration?

The National Congress of Brazil concluded the vote of the new Social Security on October 23, 2019, and the next step will be the promulgation of the constitutional amendment, so there is still no defined date to mark the enactment. However, this new Social Security will bring more predictability, legal certainty, and reduction of the public deficit. Essential conditions for the country’s growth, allowing an estimated savings of R $ 1,070 trillion over the next ten years, thus leaving room for new investments. There may be some changes to the reform before its promulgation, but these are the estimates if it remains as it is.

The main impact it would have on corporations is that they must implement a new culture of hiring. Therefore, it is necessary to change career plans, rules for bonuses and benefits, update payroll management, and review the new rules of the “FGTS” (Severance Indemnity Fund for Employees). Regarding this last point, companies would benefit, because the reform reduces the compensation paid to the worker, in case of unfair dismissal, since it goes from 40% to 20%.

Why is it relevant to have a labor consultancy in companies?

The Labor Law in Brazil is complex, and at the end of 2017, the Labor Reform was approved, which modified a series of articles of the CLT (Consolidation of Labor Laws). With these changes, any wrong decision on hiring could directly affect its effectiveness and interfere with the work environment.
Having a consultancy specialized in labor laws can guide the company to establish its organizational structure, minimizing the costs and expense impacts at the time of hiring. If there is a company that already has a structure, the consultancy can help in possible conflicts and provisions for job losses.

What specific services does Englobally Brasil offer?

We classify our work into five large groups: Accounting, which includes all legal and regulatory activities, such as financial statements, management reports, accounting review, among others; Tax Advice, which covers corporate reorganization, tax analysis for restructuring and organizational changes, tax planning, appraisal reports, mergers, divisions and acquisitions, interface between lawyers and government agents;
Consultancy, which includes legal activities and responsibilities of the general administration, representation to the Fiscal Council, budget planning, intelligent commercial analysis, experience in accounting, obtaining and settlement of negative debt certificates;
Labor Relations, which are the essential activities related to payroll processes and the entire routine of your personnel department, including benefit management; and
Financial Management, which includes the administration and control of accounts payable processes through financial inclusions and current and projected cash flow reports, which ensure proper financial management as a fundamental point for the success of the companies.

Englobally Brazil aims to provide satisfaction to its customers, seeking a leading position in the quality of the services offered. We provide competitive advantages through commercial consulting services with high-quality standards.

Image attribution: Designed by Pressfoto / Freepik

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