On December 11, 2019, Law No. 13,932 / 2019 was published, with important labor and tax implications—the most significant being the termination of the 10 percent contribution to the Severance Indemnity Fund (FGTS) by employers in the event of a dismissal without cause.

Article 12 of the law establishes the termination of this social contribution, which had been created by Complementary Law No. 110 /2001.

Note that this contribution was being challenged in court by taxpayers alleging the formal and material unconstitutionality of Complementary Law No. 110.

Finally, note that this change does not impact ongoing lawsuits, as the new law is only applicable to terminations from January 1, 2020 onward.

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.