Strike by labor authorities will cause delays

IMPACT – HIGH

What is the change? Local labor authorities (Delegacia Regional do Trabalho) have confirmed that they are on strike as of today for an indefinite period of time.

What does the change mean? Brazilian companies will face delays in admitting their foreign employees onto the local payroll, because the process depends on issuance of a Brazilian Work Booklet (Carteira de Trabalho) to the foreign employee.

• Implementation time frame: Immediate and ongoing. The strike was confirmed by the local authorities in São Paulo and may have an impact on labor authorities nationwide.
• Visas/permits affected: All Work Contract Visas that require local payroll admission.
• Who is affected: Foreign nationals entering Brazil under a Work Contract Visa with local payroll payment (NR 99).
• Business impact: The suspension in services will cause inconvenience for human resource departments onboarding foreign employees, as they will not be able to process employees onto a Brazilian payroll until the Work Booklet is issued.

Background: This strike will interrupt companies’ onboarding of foreign employees, who need to be included on local payrolls within 30 days of their arrival in Brazil in order for them to start to work and receive wages. Depending on how long the strike continues, companies may not be able to fulfill these requirements, potentially causing compliance issues for Brazilian sponsoring employers.

BAL Analysis: BAL in Brazil will monitor the progress of the strike and update clients as soon as the labor authorities resume services. In the meantime, clients should anticipate delays in issuance of Work Booklets and placement of foreign employees onto local payrolls.

This alert has been provided by the BAL Global Practice group in Brazil. For additional information, please contact brazil@bal.com.

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