Labor impacts of the Provisional Measure on Economic Freedom

By Sérgio Eliezer Pelcerman

The President of the Republic sanctioned Law 13.874 last September 20th, 2019. It was previously called Provisional Measure on Economic Freedom.

The new Law, among other attributions, makes labor laws more flexible. For example: it exempts companies with less than 20 employees to clock them in or out, it eliminates licenses for activities considered as low risk, and validates the beginning of those activities regardless the license.

Yet, among the innovations brought by this Law, there was also a modification regarding the characterization to constitute an economic group, which will effectively demand an efficacious production of proofs in order to testify activities from the same steering group or under the control of the same member, given that it justly precludes the disregard of legal personality in current judicial demands.

In addition, with the sanction of such legislation, there will be a facilitation regarding the exercise of an economic activity, as long as it observes regulations about environment, condominium and neighborhood protection, as well as labor laws. So, any economic activity shall be exercised at any time and days of the week, since all labor and social charges are paid, in order to demonstrate the fiscal and labor regularity of the company.

This way, the regulations created will be used to bring flexibility to companies and new eventual entrepreneurs, so they can start their activities with less bureaucracy. However, according to this very legal text, monitoring will be necessary to avoid disrespect to the labor laws, specially with relation to work hours and inherent rights.

Sérgio Eliezer Pelcerman, lawyer at Almeida Prado & Hoffmann Advogados Associados office