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Brazil to Pay Companies to Cut Worker Hours in Bid to Save Jobs

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(Bloomberg) — Brazil’s government will pay companies to reduce worker hours to save jobs as the country faces its worst recession in 25 years, Secretary General Miguel Rossetto said Monday.
President Dilma Rousseff will send a decree to Congress to use a government fund to pay half the salary lost by reducing worker hours by as much as 30 percent. Companies have until December to enroll in the program for six months, with the option to extend an additional six months, during which time they won’t be allowed to lay off workers.

The program comes as Rousseff’s economic team has cut government spending to help tame inflation expected to end the year at more than 9 percent. At the same time, Rousseff is seeking to introduce popular measures that will boost her record-low approval ratings.

“With this program we want to maintain existing jobs in this time of temporary crisis,” Rossetto told reporters in Brasilia.

For example, a worker who has his 2,500-real ($796.74) salary and hours reduced by 30 percent will receive 1,750 reais from his employer and 375 reais from the government, reaching 85 percent of his original salary. Employee and employer will continue to pay social security contributions based on the reduced salary.

A committee composed of representatives from five ministries will define which sectors will be eligible to participate in the program.

The decree will be valid as soon as it is published in the Daily Gazette, and it will expire in 120 days if it isn’t confirmed by Congress.

To contact the reporter on this story: Anna Edgerton in Brasilia at aedgerton@bloomberg.net To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net Robert Jameson

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Men of Value Contributor

Men of Value Contributor

Articles by various contributors to Men of Value, an online magazine for American men who value our Judeo-Christian values of faith, family, and freedom.

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