On November 11, the government launched the Verde e Amarelo Program, which will benefit young people between 18 and 29 years old who do not yet have a formal job. The main stimulus for hiring is the reduction between 30% and 34% of the labor cost in the modality, which will have a direct reduction in the payroll.

The proposal was sent to the National Congress through a Provisional Measure and is valid only for contracts with salary equivalent to the limit of 1.5 minimum wage (equivalent to BRL 1.497 in 2019).

“Some items of the Measure, such as reducing the FGTS fine from 40% to 20% and reducing the FGTS tax rate from 8% to 2% indicate progress in labor issues. Thus, the Verde e Amarelo Program instituted by PM No. 905 highlights the interest of the Federal Government in trying to foster the emergence of jobs and relieve the payroll of employers”, says Raphael Zaroni, partner of Zaroni Advogados.

Under the Verde e Amarelo program, the maximum term of the contracts will be two years, and new hires can be completed by the end of 2022. The government expects that by then the measure will generate a net balance of 1.8 million new jobs.

The government was also considering extending the program to workers over 55. This category, however, was left out.