Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
The minimum monthly salary requirement for “hyper-sufficient” employees has gone up in Brazil. Companies with operations in Brazil that employ this distinct category of employees will therefore need to verify whether the current salaries of these workers are above the minimum threshold, or take immediate steps to adjust their compensation before the last payroll of the month.
Under the Brazilian Labor Code, a hyper-sufficient employee is an employee who holds a college degree and receives a salary that is equivalent to at least twice the Social Security’s benefit cap. Hyper-sufficient employees, are, therefore, considered capable of negotiating and entering into certain agreements with their employer, including certain amendments to their terms and conditions of employment, without the need for the union’s or any other entity’s assistance.
On January 13, 2021, the Brazilian Government readjusted the maximum amount the Brazilian Social Security pays as monthly benefits to their beneficiaries, raising it from BRL 6,101.06 (around USD 1,159.53) to BRL 6,433.57 (around USD 1,222.72) per month.1 With the readjustment of the Social Security’s benefit cap, the minimum monthly salary of hyper-sufficient employees rose from BRL 12,202.12 (around USD 2,319.05) to BRL 12,867.14 (around USD 2,445.44).
Companies that decide to adjust hyper-sufficient workers’ compensation must, however, observe that, as a rule, employees in the same position are entitled to the same pay and benefits, unless there are objective, non-discriminatory reasons to differentiate among them (e.g., seniority, years of experience, etc.), preferably set forth in a Career and Salary Plan. Giving pay raises only to employees who hold a university degree (and not to those who do not, although they all have the same job title), without a career program, may give rise to equal pay and discrimination claims.
Employment Terms for Hyper-Sufficient Employees
Employment conditions established between a company and a hyper-sufficient employee are as effective as those established in a collective bargaining agreement (CBA), and supersede the terms in a CBA or those set forth in the Labor Code.
A few examples of employment conditions commonly negotiated between employers and their hyper-sufficient employees include: (i) employee self-recognition as a holder of a position of trust, thus exempt and not entitled to overtime pay; (ii) payment of a premium or a bonus with the express consent that these funds are not part of the salary; (iii) reduction of working time and salary (proportionally) during the pandemic; (iv) termination of benefits/tools; (v) discounts to salary, etc.
Employment conditions negotiated with hyper-sufficient employees before January 13, 2021 shall remain valid, even if their current monthly salary is lower than BRL 12,867.14, provided they were hyper-sufficient at the time the conditions were agreed upon, even if the respective employers do not grant them salary raises now. Any new agreements, however, could be invalid.
As a side note, starting January 1, 2021, the Brazilian national minimum monthly wage is BRL 1,100.00 (around USD 209.06), raised from BRL 1,045.00 (around USD 198.60) on December 31, 2020.2 This increase does not affect the salary of employees who earn more than minimum wage, however, as their salary raises are determined by their applicable CBAs.
* Marilia Minicucci and Pamela Gordo are attorneys with Littler’s Brazilan correspondent firm, Chiode Minicucci Advogados.
1 Ordinance SEPRT/ME # 477/2021, from the Ministry of Economy, published on January 13, 2021.
2 Provisional Measure # 1,021/2020, published on December 31, 2020.