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Brazil Could Change Law on Outsourced Labor

Brazil Could Change Law on Outsourced Labor

Brazilian workers have benefited from longtime protections that restrict the work that businesses may outsource. Under Brazilian law, companies can only outsource work that is not a key part of their primary business. Such duties may include security, cleaning, or transportation.

However, proposed legislation would allow employers to outsource all work, including both core and non-core functions. The Chamber of Deputies voted to approve the measure and now plans to discuss further modifications to the proposal.

Supporters of the bill say that the legislation will reduce uncertainty in hiring and even lead to new jobs. Meanwhile, labor groups stand in opposition, arguing that such a law would permit companies to fire their existing workers and hire outsourced replacements for less money.

Thousands of workers have been participating in rallies across the country. One of the largest rallies was held in Brasilia, where an estimated 3,000 gathered in front of the Congress building before the measure came to a vote.

The proposal, however, has yet to win the support of President Dilma Rousseff’s administration. General Secretary of the Presidency Miguel Rossetto expressed the president’s disagreement with the law in a statement to Congress, the PanAm Post reported.

“[It’s] bad; it allows every relationship to be outsourced, and therefore deteriorated. It’s not good for workers. It’s not good for the country.”

Despite the outcry from workers, the bill does retain some worker protections. For instance, the legislation would require that workers who are subcontractors be paid the same benefits – such as food, transportation vouchers, and health coverage – as a company’s regular employees.

Employees may be a company’s most valuable resource, but they also represent a company’s most expensive costs. Businesses need to be competitive and one way to do that is to reduce costs. If workers become outsourced labor rather than employees, a company could potentially reduce its employment tax liability.

Companies also need to remember that outsourcing work beyond non-core functions can affect work quality. Many would argue that the workers who do the best work are those who regularly report to a company rather than being shifted in and out like interchangeable parts.

Debate is still underway over how to give employers more flexibility, while also retaining some worker protections. Now it’s up to lawmakers to ensure that the law they pass strikes that balance.