It is expected that the program will cover three million young people in their first job and the work contracts will last for two years.

The Yellow Green Program to stimulate job creation in Brazil was launched this Monday at 17 pm by President Bolsonaro. The package implemented through a provisional measure (MP), will be for young people between 18 and 29 years old and people over 55 years old with low income, with salaries of up to 1,5 minimum wage.  Know the differences between temporary, intermittent and part-time work contracts in Brazil.

It is expected that the program will include three million young people in their first job and the work contracts will last for two years, to be signed from January 2020, with hiring being allowed until the end of 2021.

The advantage for employers is the reduction of labor charges. According to economist José Pastore, the package of measures will result in a 50% payroll tax exemption.

The only charges that will remain are the contribution of the FGTS, reduced from 8% to 2%, and Occupational Accident Insurance (SAT). All others, such as payments for Social Security, the S System and education allowance, will be reset to zero; in addition to the FGTS fine on dismissals without just cause also falling from 40% to 20%.

According to the project, companies will not be able to replace current workers with others who have a lower cost. They will only be able to hire employees in the new modality that exceed the existing amount when the MP was sent to Congress.

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To make up for the loss of revenue with payroll tax relief, Bolsonaro intends to use the resources that will be saved from the fine-tooth comb on INSS benefits, which should reach R$ 9,8 billion this year. As for next year, it is expected that the reduction in expenses will reach around R$ 20 billion.

The program will be accompanied by other measures in the labor area, such as the reduction of bureaucracy in agreements between companies and employees on topics such as the hour bank, overtime and judicial agreements.

The idea is to completely release employers from negotiations with unions regarding the bank of hours, for example. Today, companies can only individually negotiate hourly banks lasting up to six months.

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For the economist, the employment program should have greater adherence of medium-sized companies. They are the ones who are generally more cautious when activity resumes, preferring to work with informal workers.

With the program, these employees can be formalized, remembering that one of the objectives is to benefit the most vulnerable workers, comments Pastore.