Executive Order No. 927/20 (MP 927/20), enacted on March 22, provides for labor measures that may be adopted by employers to confront the state of public emergency decreed as a result of the covid-19 pandemic. In order to preserve jobs and reduce the negative economic impacts of the crisis, one of the alternatives presented in MP 927/20 is the creation of a special offsetting arrangement for work hours through an hours bank.

The adoption of this arrangement will allow employees to offset the time of interruption of their activities due to the decree of public emergency and quarantine when the work is resumed. The offsetting will be done via extension of the work day by up to two hours a day, subject to the daily limit of ten hours of work.

Companies interested in adopting the measure must establish an hours bank by means of an individual formal agreement with the employee or collective bargaining agreement, as already established in the Consolidated Labor Laws (CLT).

The great advantage of the measure is that the time limit for offsetting has been significantly increased. While the CLT provided that the offsetting resulting from the hours bank arrangement would have to be performed within up to six months in the case of an individual agreement, and within up to 12 months in the case of a collective agreement, MP 927/20 establishes a period of up to 18 months, counting from the end of the decree of the state of public emergency.

The proposal represents a change from the common idea of subsequent offsetting of prior work performed as overtime. In the hours bank established in MP 927/20, employees will have an initial negative balance, to be offset with overtime in the future.

For companies that already have an hours bank plan, it will be necessary to analyze the current terms on a case-by-case basis to determine whether the plan can be reconciled with MP 927/20 or whether there is a need to rework it.

By allowing more intense activity after the cessation of the state of public emergency, the adoption of the hours bank provided for in MP 927/20 may be a way out for the recovery of the sectors most affected by the work stoppage, such as retail, restaurants and services, and others whose activities are incompatible with teleworking.

With this measure, the expectation is that, after the end of the decree of the state of emergency, companies may recover the production gap and minimize the economic effects that will certainly be felt by all sectors of society.