Labor | Labor Force Overtime Hours in Brazil: How Companies May Reduce Labor Liabilities

This week, the Superior Labor Court (TST) released the most recurring topics in rulings throughout 2024.

Among the approximately 513,000 cases analyzed, overtime and intraday break violations topped the ranking, with 70,508 and 48,283 cases, respectively.

The main issues discussed include applicable divisors, suppression or reduction of working hours, calculation bases, residual minutes, and their impact on other salary components. Additionally, there was a 20% increase in the number of cases judged on this subject compared to the previous year, highlighting the impact of these matters on labor relations.

Given this scenario, strategic management of working hours becomes essential to mitigate risks and avoid unnecessary costs. Small errors, such as failures in time tracking or payroll configuration, can result in significant labor liabilities.

To minimize these risks, here are 5 best practices for more efficient management:

1. Bank of hours: In addition to the bank of hours, which can be negotiated with labor unions to compensate for employees’ overtime, it is also possible to implement an individual written agreement, provided that compensation occurs within six (6) months (Article 59, §5 of the CLT). This approach helps reduce overtime costs and provides greater flexibility in working hours. However, careful management of time banks and compensation practices is essential to ensure compliance and avoid potential risks.

2. Review of Employees Exempt from Time Tracking: Managers, external workers, and remote employees are exempt from time tracking (Article 62 of the CLT). However, with technological advancements, it is important to reassess the risks of possible reclassification of these positions, especially if the company has means to monitor working hours. Errors in classification can generate hidden liabilities, including potential overtime claims and health-related impacts on workers.

3. Automation and Technological Control: The CLT limits overtime to two hours per day. Automated systems help monitor this limit, prevent violations, and reduce the burden on the HR team.

4. Accuracy in Overtime Calculations: Many labor claims arise from errors in overtime calculations. Implementing a thorough review of payroll settings and practices, with the support of accounting and legal consultancy, can reduce mistakes and ensure legal compliance.

5. Flexible Work Schedules: Flexible hours increase employee engagement and reduce absenteeism. Additionally, this strategy can minimize the need for overtime and, consequently, prevent labor liabilities.

The significant increase in labor lawsuits reinforces the importance of efficient working hours management. Companies that invest in structured policies, control technologies, and best practices not only reduce legal risks but also improve productivity and employee well-being.

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