The Brazilian National Confederation of Industry estimates that reducing the workweek from 44 to 40 hours could raise formal employee costs by R$ 178.2 billion to R$ 267.2 billion annually.
In a recent report released by the Brazilian National Confederation of Industry (CNI), it is estimated that a proposal to reduce the weekly work hours from 44 to 40 could significantly increase annual labor costs for companies by approximately R$ 178.2 billion to R$ 267.2 billion. This change represents an increase of up to 7% in payroll expenses, which could have profound implications for businesses operating in the Brazilian economy. As this debate becomes a focal point in the current electoral campaign and social media discussions, it might resurface in legislative discussions as early as 2026.
CNI President Ricardo Alban expressed concerns regarding the potential outcomes of such a reduction, stating that it is likely to lead to lowered production levels and increased unit labor costs, putting pressure on the competitiveness of national companies. Alban highlighted that these changes could subsequently lead to reduced production rates, job losses, and income decline, thereby negatively impacting Brazil's gross domestic product (GDP). This warning from the CNI underscores the economic ramifications that could stem from changing labor laws in Brazil, especially during a politically charged atmosphere.
The CNI’s projections include two potential scenarios, reflecting various assumptions about how labor hours might be adjusted. As discussions around labor reform evolve, stakeholders in the Brazilian economy will need to weigh the benefits of reduced working hours against the associated costs and potential negative effects on employment and economic growth.
