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New Unemployment Law Trims Benefits for Workers

New Unemployment Law Trims Benefits for Workers

Brazil’s political leaders are taking steps to get the government’s fiscal house in order. A recent unemployment law aims to save money by restricting unemployment benefits to Brazilian workers. While the new law will save the government money, it will also mean less money for some Brazilians.

The new Brazilian unemployment law will permit workers to claim benefits only if they have worked for at least 12 months out of the last 18 months in a formal position, The Rio Times explains. The previous unemployment law was more generous, permitting workers to claim benefits it they had worked only six months. The change, along with another bill that would limit pension benefits, is estimated to save the government up to 15 billion reais per year, according to calculations from Brazil’s Planning Ministry.

The new law comes as a growing number of Brazilians find themselves without jobs. According to the latest figures from the Brazilian Institute for Geography and Statistics, the unemployment rate from February through April rose to 8 percent. While Brazil had managed to keep unemployment levels low even while much of the world experienced economic struggles, the labor market has weakened in the last year, coinciding with the weakening economy, La Prensa explained.

Though President Dilma Rousseff approved the new unemployment law, allowing it to take effect, she did veto two parts of the law that were approved by Congress. Lawmakers wanted annual salary bonuses to be paid only to those who had worked at least 90 days. Rousseff’s veto of that provision maintains the previous rule requiring workers to work only 30 days in the calendar year to qualify for the bonus. President Rousseff also rejected proposed restrictions of unemployment benefits for rural workers. With her veto, rural workers and urban workers will receive the same benefits under the same requirements.

Brazil’s leaders have been pursuing a wide range of financial measures – so-called fiscal adjustments – to put the nation’s finances on better footing. Along with budget cuts, the government is removing price controls that were implemented as a way to stem inflation. Time will tell how far those measures carry the government to its ultimate goal of fiscal stability. But the new unemployment law shows that the government expects its citizens to share in the financial sacrifice.

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