New Law Expands The Maximum Term For Engaging Temporary Workers

The Ministry of Labor and Employment issued a new regulation ("Portaria 789") to Federal Law 6.019/74, which regulates the engagement of temporary workers, allowing employers to retain temporary workers for a longer period of time under prescribed circumstances. This new regulation became effective July 1, 2014.

Consolidated guidance of the Brazil Superior Labor Court of 1993 generally prohibits outsourcing, except under limited circumstances. Law 6.019/74 provides that companies may engage temporary workers through a temporary staffing agency only in one of two scenarios: (1) to temporarily substitute a regular worker on leave; or (2) to provide services during an extraordinary increase in workload.

This "temporary worker" exception carried its own set of restrictions. First, it limited the temporary worker's tenure to a maximum of three months. Second, while the tenure could be extended for an additional three months, the client company (recipient of the temporary worker's services) was required to obtain an approval from the Ministry of Labor and Employment, which required that the company justify its request for the extension. These restrictions, coupled with the difficulties of getting the tenure extended, created managerial nightmares for HR and, in many cases, resulted in non-compliance with the law.

The new regulation to Law 6.019/74 now allows companies to retain temporary workers for up to nine months to substitute employees on long leaves. The longer tenure, however, does not apply to coverage for an extraordinary increase in workload.

This amendment affords companies some flexibility to reduce disruption in services, such as in the case of a worker on maternity leave. Brazil's law provides mothers with four months of maternity leave and grants tax breaks to companies that provide an additional two months of leave. In addition, women workers typically try to avoid using their vacation days prior to giving birth, so as to use all accrued vacation days to care for their newborn. As such, an employee's maternity leave can extend to seven...