New Ordinances Streamline Employer Reporting Requirements In Brazil

Brazil continues to streamline employer submissions of required employment data by integrating more workplace reporting requirements into the eSocial system. Coming on the heels of the Economic Freedom Act (Law 13.874/2019), which contains several provisions to consolidate and digitize employment information, two recent ordinances provide employers an easier process to submit employment data to the government. One ordinance applies to reporting requirements for the RAIS and CAGED systems,1 and another addresses digitizing the Employee Registration Book. Most of the provisions within these ordinances take effect on January 1, 2020.

The eSocial platform aims to reduce employer paperwork and redundant filing requirements for four large agencies: the Internal Revenue Service, the Social Security Institute, the Economy Ministry,2 and the government bank that manages national employee savings funds FGTS. The government's eSocial website recently reported that over 5.7 million employers are using the system, representing nearly 40 million workers registered on the platform.

Ordinance No. 1,127

Ordinance No. 1,127, issued on October 15, 2019, allows employers to submit data previously reported to the RAIS and CAGED registries directly into the eSocial system. CAGED is the government registry to which employers report hiring and dismissal information, starting salary, termination dates and final salary, and employee transfers. RAIS is the registry for the annual reporting of social security information such as date of birth, monthly salary payments and date and reason for termination. Under the new ordinance, most companies will soon be able to submit employment statistics and personnel information digitally through the eSocial platform, which should simplify reporting requirements by eliminating most paper documentation. In addition, employers will only be required to enter information once, reducing redundant filings and potential inconsistencies.

While larger companies will experience reduced filing burdens beginning in January, employers that do not use eSocial will not be able to take advantage of the digital filing option. For CAGED information, government and international entities are not currently obligated to use eSocial data entry, so those bodies will need to continue filing as in the past. Data for RAIS submissions will be submitted as in the past for small or micro companies, farmers, and non-profits as well as international or...