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When Brazil increased its monthly minimum wage by a staggering 4.1%, surpassing 1,000 Brazilian reals for the first time, employers had to find ways to minimize costs elsewhere to improve their bottom line.
An area of opportunity organizations may not have considered is labor scheduling. By investing in an employee automated scheduling optimization tool, organizations can better control labor costs to offset these wage increases. Here’s how.
Adhere to More Flexible (Yet More Complex) Regulations
Historically, Brazil has had very strict, inflexible labor laws. Over the past two years, updates have been made to give employers more options to navigate set work hour limits and time off allowances.
| OLD LAW | NEW LAW | |
| WORKING HOURS | The working hours are limited to 8 hours per day, 44 hours per week, and 220 hours per month. There can be up to 2 hours of overtime per day. | The Brazilian legislation provides for the possibility of a 12-hour work journey if followed by 36 hours off. This modality can be negotiated; it still depends on regulations and only applies to specific cases. Another change regarding the work journey is the possibility of establishing a bank of hours, with compensation every 6 months, by individual agreement without the union’s consent. |
| TIME WITH THE COMPANY | The Brazilian Consolidation of Labor Laws (CLT) considers the period when the employee is at the disposal of the employer, awaiting or carrying out orders, as effective working hours. | Activities carried out during working hours on company premises – such as rest, studies, meals, interaction between colleagues, personal hygiene, and change of uniform – shall not be considered part of the workweek. |
| TIME BANK | Excess hours worked in one day may be compensated on another day, provided this does not exceed the total number of expected workweeks in a one-year period. There is also a cap of 10 hours per day. | The time bank may be established in writing by individual agreement and without the union’s consent, provided that compensation is made in the same month. Compensation can also be negotiated to be made within a six-month period. |
| BREAK BETWEEN WORK PERIODS | Employees who work to the standard 8 hours per day shall be entitled to a break of at least 1 hour, and no more than 2 hours, for rest or for a meal. | The rest break during the workday may be set by collective negotiation, provided it is at least 30 minutes. If the employer does not grant the minimum interval for rest or lunch, or grants it only in part, the compensation for the time not granted shall be increased by 50% of the remuneration amount of normal working hours. |
| VACATION | The holiday entitlement of 30 days can be split into no more than two periods, neither of which can be less than 10 days. There is the possibility of paying one third of the holiday entitlement to the employee as a cash payment in lieu. | The holiday entitlement can be divided in up to three periods, by agreement, provided one of the periods is at least 14 calendar days, and the other two not be less than 5 days each. |
| PART-TIME WORK | The CLT sets out a maximum workweek of 25 hours, with overtime being forbidden. The worker is entitled to proportional holidays of no more than 18 days and must not exchange holiday days for cash in lieu. | The duration can be up to 30 hours a week, without any possibility of weekly overtime, or up to 26 hours a week or less, with up to 6 overtime hours paid at time and a half. One third of the holiday entitlement period may be paid in cash. |
Since the updated laws provide various ways to schedule workers as opposed to a “one size fits all” approach, employers need to properly track hours worked and leave balances for every employee to truly benefit from this newfound flexibility.
Staying on top of these nuances is difficult with paper and spreadsheets, since employee information is not centralized, and manual processes are prone to human error. For example, a supervisor may ask an employee who normally works an 8-hour shift on Tuesdays to work 12 hours that day, unaware that they were also scheduled to work the next day. Now, that employee would not be able to work the Wednesday shift as it violates the 36 hours off rule, creating a cascading list of scheduling issues.
With an automated scheduling solution that has configurable compliance rules, workflows, and reports, your organization can easily remain compliant with Brazil’s current and future labor laws. While the shift schedule will automatically generate based on your pre-set rules, manual schedule creation and modification can be utilized when necessary. Schedulers are alerted when they violate a rule and are either given a chance to back out or adjust to remain compliant, or they can complete a waiver form as needed.
Your organization will consistently avoid fines and employee grievances, since major criteria like time off and hours worked is integrated at the point of scheduling.
Simplify Annual Vacation Planning
After 12 months of employment, an employee is entitled to 30 days of paid annual leave. The leave must be taken within the following 12-month period.
Compared to other countries, Brazil offers some of the most generous paid vacation allowances. This coupled with the holiday entitlement rule changes create an opportunity for organizations to plan ahead to avoid errors.
Organizations can replace their error-prone manual tracking and management processes with an automated Annual Vacation Planning tool. Employees select the upcoming year’s vacation and the platform creates the schedule. The order in which employees get to pick their preferred timeslots is done in whatever way works best for the organization: “Active Pick” lets employees choose their weeks in seniority order, while “Open Enrollment” has everyone choose at the same time (requests are automatically approved/denied based on pre-set rules).
To ensure no violations occur, organizations can put in restrictions to “black out” dates that employees cannot take off. To comply with Brazil’s policy that annual leave cannot be taken 2 days before a public holiday or weekend, schedulers can input that restriction before allowing employees to select their preferences.
Brazilian organizations have an opportunity to set all employees’ leave expectations early on, without the headache of having to do everything themselves on paper. This keeps employees happy and employers compliant to the laws.
Reduce Unnecessary Overtime
With only 2 hours of overtime allowed each day, overtime hours are a precious commodity that cannot be wasted.
For organizations that are behind on automation, 27% of overtime costs are unbudgeted. Organizations in Brazil cannot afford to distribute unnecessary overtime because they may not be able to schedule their essential employees during times of need (e.g., meeting a sudden change in production needs).
The most effective way to reduce unnecessary overtime is by automating the entire scheduling process. Here are all the cascading effects that an automated scheduling optimization tool can provide:
- Automatically generate a schedule in minutes that follows operational and compliance rules
- Have a centralized system of record for pertinent employee information (hours worked, overtime hours, certifications, leave balances)
- Ensure positions are always staffed to what you need by capturing labor trends that will allow you to issue overtime strategically and only when necessary
Save Money and Increase Efficiency With Indeavor
Indeavor’s automated labor optimization solution can help global enterprises save money and increases process efficiencies. We work with organizations around the world (including Brazil) schedule to match their labor requirements, adhere to everchanging labor laws, distribute overtime strategically, and manage leave quickly and accurately.
Click here to request a demo or give us a call today.
Indeavor’s solution offers clients an end-to-end, cloud-based employee scheduling and workforce management solution. By integrating with your human capital management and enterprise resource planning systems, you can leverage a robust platform that provides you with real-time employee data. Relieve your supervisors of manual tasks and the constant mental fatigue brought upon by scheduling changes by automating the entire process, connecting the data to all of your existing corporate systems, and ensuring you always have the right qualified employee in each position.
