Brazil payroll loan and employment regulation updates

Regulatory changes regarding payroll-deductible loans and employment contracts have been implemented at both the state and federal levels in Brazil.

In Rio de Janeiro, acting governor Ricardo Couto issued a decree to protect civil and military servants, retirees, and pensioners from over-indebtedness. The new rules limit total voluntary deductions to 40% of monthly income, with 35% for loans and 5% for payroll credit cards. To prevent excessive debt, new loans are prohibited if total deductions reach 70% of the payroll base. The regulations also cap the Total Effective Cost (CET) at 2% per month and mandate transparent disclosure of interest rates and final costs.

At the federal level, updates to Law 8.745/1993 established new parameters for temporary employment, requiring a 24-month waiting period before rehiring certain temporary contract holders, unless a new selection process is conducted. Additionally, following the expiration of Provisional Measure No. 1.355, the payroll-deductible loan margin for federal executive employees returned to 45% of remuneration, partitioned into 35% for loans, 5% for payroll credit cards, and 5% for benefit cards.