Brazil Extends Employee Salary-Reduction Period to 8 Months

The Brazilian government Oct. 14 extended for two more months a program that began in April to allow companies to temporarily reduce the salaries of employees in order to mitigate the economic difficulties brought by the coronavirus pandemic.

Under the program, companies may reduce the salaries of their employees by 25%, 50%, or 70% with a corresponding reduction in hours. The government pays an equal percentage of unemployment benefits to the affected employees. Companies can also opt for the complete suspension of work contracts without the payment of salaries.

Employers could initially participate in the program for two months, but ...