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eSocial: New Labour Legislation in Brazil

Key aspects and details of eSocial – Brazilian New Labour Legislation

The eSocial Steering Committee of Brazil has issued Resolution 21, which determines the employer’s commitment to implement the eSocial platform. The new system will be effective from 1st October 2018.

The changes implemented by the Brazilian government are set to enhance the enforcement of Brazilian labour and social security laws, promote transparency, integrate data collection via a single platform, reduce fraud and make regulatory enforcement actions and audits easier for the government to conduct.

The eSocial Electronic Platform will require all companies in Brazil to submit employee-related data, such as social security contributions and enrolment, as well as payroll information to the Brazilian government.

Below we have outlined the most important changes of eSocial to employee-related compliance in Brazil.

  1. Prior Registration approval by eSocial
    Employers shall comply with a Prior Registration that must be approved by eSocial before enrolment can take place, and contract of employment can be issued. In case there is any discrepancy in the prior registration, the start date of the employee will be automatically postponed until the discrepancy is solved by the EMPLOYEE directly at the competent governmental entity.
  2. Employee’s medical admission exam
    The employee’s medical admission exam must be uploaded to the eSocial system PRIOR to the employee enrolment and start date.
  3. eSocial fines
    Employers who fail to submit data on the set deadline or who submit information which includes discrepancies, inaccuracies or omissions, will be subject to fines as set forth in the eSocial legislation.
  4. Salary payment
    Employers will have to close all payroll additional information by the last working day of the month (overtime, variables, sick leave, maternity leave amongst others). This means that salaries can no longer be paid by the last working day of the current month, since payroll will be under submission to eSocial on that date. The platform forces employers to follow the CLT determination and pay salaries by the 5th business day of the subsequent month, considering of course all data from all employees is properly submitted into the eSocial platform by the required date (last working day of the current month). If the deadline is missed, the employer will be unable to close payroll.
  5. Annual holiday leave 
    Employees will have to communicate their annual holiday leave dates earlier to the employer allowing enough time for approval. All annual holiday leave dates need to be inserted into the eSocial platform at least 30 days in advance. Backdating is not possible inside the eSocial platform.

Capital GES has been a trusted PEO and Employer of Record for over 27 years globally and 14 years in LATAM. With in-house knowledge, we are able to provide our clients with the most up-to-date information and guidance to allow them to navigate the most complex labour markets in the world with success and accuracy.
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