Provisional Measure 905/2019: Green and Yellow Contract and other labor amendments

December / 2019

On November 12, 2019, was published the MP 905/19, which dealt with many labor issues, including a new hiring mode: the Green and Yellow Contract.

According to a government report, the MP brings provisions to reduce costs and bureaucracy to the employer when hiring, encouraging the first job for young people aged 18 to 29 years.

The Measure provides that workers may be hired, by the new modality, workers who have their monthly base salary of up to 1.5 minimum wage, approximately R $ 1,497, defining that the duration of the contract may not exceed 2 years, under penalty of being converted in an employment contract with CLT's regular obligations. Quantitatively, companies may have employees hired by Green and Yellow Contract up to 20% of employees.

The new institute provides for a monthly tax rate on FGTS contribution of 2% on salary, as opposed to the 8% rate applied to regular employees. Also at this point, the termination indemnity of FGTS in this contract is 20%, regardless of the reason for termination, being due even in the event of just cause.

This contract also provided for the unhealthiness surcharge of 5%, unlike the 30% provided for in the CLT, limited to the assumption that there is exposure for at least fifty percent of the worker's workday. Other rights provided for in the CLT, such as 13th salary, vacation and constitutional third and overtime were also guaranteed for this contractual modality.

The dismissal of regular employees and their rehiring in the Green and Yellow modality was expressly prohibited by the legal text. However, in cases where the employee works in the condition of minor apprentice, loose, experience, or intermittent, may be rehired in the mold of the new modality.

Among other details of hiring Green and Yellow, the MP also changed other general provisions of the legislation, for example, revoking the forecast that equated the commuting accident (occurred outside the company on the home-work route) with the occupational accident, releasing the companies. due diligence in that case.

As this is a Provisional Measure, it will be valid for 60 days and may be extended for another 60. Within this period, it must be voted and approved by Congress to become law, otherwise all the provisions will expire.

The vlm|a office is available for further information and guidance on the subject and on matters relating labor relations.