2019-2021 Salary Raise from the Sao Paulo Commercial Union

Lately, I have been asked by some Chinese friends here in Brazil about the document regarding 2019-2020 salary raise from the Sao Paulo Commercial Union, because the rules stated in the document are ambiguous for foreigners to understand and they have difficulty implementing this raise in their companies. Therefore, I thought of sharing here and make it easy to everyone.

The document published mainly involves two subjects: salary adjustment and cash allowance for compensating the non-adjustment since last year.

1. Rules for Salary Adjustment

(1) Employees admitted between 2019/9/1 to 2020/8/30: The adjustment will follow the rate or amount below against the admission salary according to the admission time.

(2) Employees admitted after 2020/9/1: No adjustment

(3) Employees who have effective employment contract between 2020/8/31 to 2021/5/1 or until now:

• Monthly salary until 9000BRL: adjust 2.94% against the salary base on 2019/9/1
• Monthly salary above 9000BRL: adjust at least 265 BRL for monthly salary

The salary adjustment takes effect from 2021/5/1.

2. Rules for Cash Allowance Distribution

In my understanding, as there is no adjustment published in 2020, the union asks companies to pay cash allowance according to the admission period of the employees. This cash allowances can be paid up to 4 installments and it has the indemnity character which will exempt it from taxes.

The salary adjustment and cash allowance rule shall also be applied to ex-employees if they fit the terms above. In this case, companies would better contact their ex-employees to communicate about the payment, and once the ex-employees confirm, companies have the obligation to pay, otherwise ex-employees can sue the companies.

For all this kind of documents published by the authorities, my suggestion is to read carefully first to try to understand as much as possible and then to discuss with a labor lawyer to confirm whether your understandings are correct. The unions also have contacts for you to confirm the details with. In this way, you could have a clear picture and avoid mistakes in implementing the decrees, thus avoiding labor conflicts or troubles.

Jocelyn

June 30, 2021