Published on September 5, Law 14,442/22 substantially amended the rules on food allowances and remote work.

The new law clarifies that the amounts paid by the employer as food allowance, provided for in paragraph 2 of article 457 of the Brazilian Labor Law (“CLT”), must be used for the payment of meals in restaurants and similar establishments or for the purchase of foodstuffs in commercial establishments.

The concept of food allowance encompasses both food vouchers and meal vouchers.

Regarding the hiring by employers of a legal entity to provide the food allowance, the legislation now states that the employer cannot demand or receive:

  • any kind of discount or imposition of discounts on the contracted value;
  • onlending or payment terms that denature the prepaid nature of the amounts to be made available to the employees; and
  • other amounts and benefits not directly related to promotion of the employee's health and food safety in the contracts executed with companies that issue food allowance payment instruments.

The prohibitions on the relationship between the employer and the companies that provide the food allowance established by the law do not apply to contracts for the provision of food allowances in effect until their termination or until the period of 14 months has elapsed from the date of publication of the law (November 5, 2023), whichever occurs first. It is forbidden to extend a contract for the provision of a food allowance that does not comply with these prohibitions.

The new legislation establishes a fine ranging from R$5,000 to R$50,000, applied in double in the event of recurrence or obstruction against inspection, inadequate execution, deviation, or distortion of the purposes of the food allowance by the employers or companies that issue the instruments for payment of the food allowance.

The establishments that sell products not related to employee nutrition and the companies that accredited them are also subject to a fine. The criteria and parameters for calculating the fine will be subject to an act by the Ministry of Labor and Social Security.

From a tax standpoint, the new legislation amends the provisions of Law 6,321/76, which deals with deduction from taxable income for corporate income tax purposes, to establish that corporate entities may deduct from taxable income, for corporate income tax purposes, twice the expenses proven to have been incurred during the base period in worker food programs previously approved by the Ministry of Labor and Social Security, in the manner and limits set forth by the decree that regulates the matter.

The new law also establishes that expenses allocated to worker food programs (so called “PAT”) must cover exclusively payment of meals in restaurants and similar establishments and acquisition of foodstuffs in commercial establishments.

Law 14,442/22 reproduces in Law 6,321/76 the prohibitions on the relationship between the employer and the companies that provide food allowances (such as prohibition on any kind of discount on the contracted value). The prohibitions will be in effect as defined in the regulations for the worker food programs.

The new legislation also provides that food payment services contracted to carry out food programs must observe the following additional rules:

  • placement into operation by means of closed or open payment arrangements, and companies organized in the form of closed payment arrangements, must allow interoperability among themselves and with open arrangements, indistinctively, to share the accredited network of commercial establishments, as of May 1, 2023, it is worth noting that operation of open arrangements is allowed as of now. 2023 is the date as of which the sharing of accredited networks will be mandatory, always respecting the commercial conditions established; and
  • free portability of the service upon express request of the worker, in addition to other rules set forth in a decree from the Executive Branch, as of May 1, 2023.

In relation to the penalties applicable in the event of inadequate execution, deviation, or distortion of the purposes of the worker food programs by the beneficiary legal entities or companies registered with the Ministry of Labor and Social Security, the new legislation introduces a provision in Law 6,321/76 that establishes the same fine mentioned above, in the same terms.

Furthermore, it establishes as a penalty the cancellation of registration of the beneficiary legal entity or registration of companies linked to the worker food programs registered with the Ministry of Labor and Social Security, as of the date of the first cancellable irregularity and, consequently, loss of the tax incentive of the beneficiary legal entity.

If the registration of the beneficiary legal entity or registration of the companies linked to the worker food programs registered with the Ministry of Labor and Social Security is cancelled, a new enrollment or registration with the same ministry can only be requested after the deadline to be defined in regulations.

It is important to explain that the penalties established by Law 14,442/22 as a result of inadequate execution, deviation, or distortion of the purposes of the food allowance by employers or companies that issue instruments for payment of the food allowance are applicable to all companies, regardless of whether they are enrolled in food programs, with the exception, of course, of cancellation of the registration of the legal entity in food programs, applicable only if the company is enrolled in a food program.

Due to the changes introduced, companies must reevaluate their food allowance programs to adapt them to the new rules, both from the labor/employment perspective and from the tax and regulatory perspective, especially companies that adopt flexible benefits policies.

In addition to the changes regarding the food allowance, Law 14,442/22 also introduced changes regarding remote work. We addressed this topic in another article, available through this link.

Machado Meyer Advogados will continue to monitor the evolution of the matter and its potential developments. Keep up with our publications by subscribing to our newsletter.