Employer Action Code: Act
Congress has approved amendments to the Labor Code to regulate remote working. The amendments make permanent Executive Order (EO) No. 1,108, a temporary measure released earlier this year, that includes an expanded definition of remote work, rules governing working hours and overtime for remote workers, requirements in the event of returning to the office, and, on a different note, new rules for providing meal/food vouchers. The legislation was signed into Law by the president on September 5, 2022 (Conversion Law N° 14,442/22) and came into effect on the same day.
Following are notable provisions of the EO (and by extension, the conversion Law):
- The definition of remote work (i.e., work regularly performed outside the employers’ establishment via information technology [IT] or telecommunication means) is expanded to include remote work on a hybrid, regular/permanent and on a casual basis, provided the remote work arrangement is explicitly addressed and agreed upon in the employment contract.
- Employers and employees can individually negotiate the terms and conditions for remote work, such as working hours (subject to statutory rest breaks) and the provision and use of IT equipment.
- As a general rule, employees working remotely are subject to working hours limitations and timekeeping rules as previously established in the Labor Code and will thus be entitled to overtime compensation. Only in the event of employment based on fixed piece rates (e.g., per project or piecework) will remote workers be exempt from working hours rules. Prior to EO No. 1,108, provisions on working hours did not apply to employees working remotely. (Note: Employees in positions of trust, general management and other executives remain exempt from statutory provisions on workings hours, regardless of a remote work arrangement).
- If employees choose to work remotely from a location other than that agreed upon, the employer will not be responsible for covering or reimbursing relocation expenses.
- Apprentices and interns will be eligible for remote work on the same basis as regular employees. Additionally, employers must prioritize employees with disabilities or with dependent children under age four in assigning remote working opportunities.
- Meal/food vouchers must be used exclusively for food or meal purchases in restaurants or other commercial establishments (e.g., grocery stores). Employers are prohibited from receiving any discounts for contracting onsite cafeteria services to provide meal benefits in order to avoid such discounts from being incorporated into the meals’ final price, in which case the costs are borne by employees.
It’s expected that introducing these provisions into the Labor Code will significantly affect the long-term use of remote work and the terms and conditions for these arrangements. Among companies surveyed, 61% have an established program for flexible working hours and 51% have formal work-from-home policies. Employers are encouraged to review their remote work policies and arrangements in order to identify opportunities or issues that may arise from permanent enactment of the changes.