Brazil unveils $10 bln scheme to protect jobs threatened by coronavirus

BRASILIA, April 1 (Reuters) – Brazil’s government on Wednesday launched a program that will allow companies hit by the coronavirus crisis to reduce workers’ salaries and hours, or temporarily suspend contracts, in order to preserve as many jobs as possible.

The program could potentially help save up to 12 million jobs, according to Economy Ministry estimates, and will cost the Treasury 51 billion reais ($10 billion).

It forms part of a broader 200 billion reais government package to safeguard jobs and help companies pay wages, according to Economy Minister Paulo Guedes. It will officially come into effect by an executive decree to be published on Thursday.

According to the scheme, companies will be allowed to reduce wages and hours by up to 70% for a period of three months, with the government partially making up workers’ lost earnings. Alternatively, companies will be able to suspend workers’ contracts for up to 60 days.

The government’s contributions will be limited, staggered and capped to varying degrees, depending on each employee’s earnings and the measure taken by each company.

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