Working Hours and Telework Expense: Remote Work Challenges For Brazilian Employers

November 17, 2020

The COVID-19 pandemic has forced many companies to review their organizational and staffing strategies in Brazil.  There is, however, limited guidance for Brazilian employers on how to manage the approximately 8 million people who are working remotely.  We will look at the current regulations and best practices on working hours and cost related to telework through a case study of Bradesco's Bank's teleworking collective agreement. 
 
“Telework” vs. “Working from Home” – The Basics in Brazil:  The Brazil Consolidation of Labor Laws (CLT) defines two types of remote work: physically working from home and teleworking – the latter was included in the 2017 labor reform bill.  Telework constitutes activity performed predominantly through information systems, such as computers or telephones.  “Working from home” does not require the same use of technology in Brazil.  For instance, a tailor hired by an employer to produce garments from their house is considered “working from home” and not “teleworking”.  
 
The distinction between “teleworking” and “working from home” in Brazil is important.  Per the CLT, people “working from home” have the same rights as those who work on-site, including working hours control, overtime payment and hour bank (compensation of accumulated payable hours). In contrast, telecommuting employees can be excluded from the CLT's chapter on working hours with certain exceptions. 
 
Although the laws give employers freedom to manage their teleworkers’ work schedule, a well-established and consistent workplace policy around working hours remains a good practice. Employers’ access and control of working hours, with considerations of flexibility and ability to disconnect, cannot only protect the health of workers, but also mitigate the risks of legal claims and union challenges. 
 
For example, In Bradesco Bank’s agreement, the company agreed to adopt a new HRIS system to record working hours for teleworkers. In addition, any work activity during break periods was prohibited or, if they occurred, were properly counted as overtime.
 
Telework Expense: There are no provisions in Brazilian Labor Laws regarding an employer’s obligation to compensate employees for teleworking expenses (electricity, internet, and telephone). These terms are typically decided through negotiation between employers and unions or employees. 
 
However, companies might consider providing financial support to create adequate work infrastructure and to prevent legal disputes.  Reimbursements or monthly cost allowances to individual employees are options for employers.  It is important to note that both strategies can create internal accounting and taxation issues.  
 
An alternative to regulating the individual payments to employees is through collective bargaining agreements with trade unions.  For example, Banco Bradesco, in addition to regulating remote work hours, provides for an annual payment of Real 1,080 (USD $198.70) to employees for their telework expense.  Notably, according to a framework recently developed by the Brazilian government to regulate public sector workers, such expenses will be paid by the workers themselves, if they choose to work from home.  This could be a new trend transferred to the private sector when an employer is not willing or able to offset those costs. 
 
Outlook:  Multiple draft bills related to remote work are in the process of being proposed as it becomes permanent in some industries. Companies in Brazil must adjust their employment operations to comply with newer law, as well as meeting their workers’ needs.