Brazil Eases Rules for Workers' Severance Fund Disbursements
Brazil's government on Friday issued an executive order temporarily relaxing rules for disbursements from workers' severance fund FGTS, a measure that could release as much as 12 billion reais ($2.04 billion) to about 12 million workers. The relaxation of rules allows workers dismissed since January 2020 to access their remaining balance, even if they had previously chosen the annual withdrawal option, and will start in March. This change aims to alleviate financial strain on thousands of employees who lost their jobs during the pandemic.
- The easing of these regulations could have far-reaching implications for Brazil's economy, as it may encourage more workers to re-enter the job market, potentially boosting economic growth.
- Will this measure also lead to an increase in labor disputes and strikes, as workers with easier access to severance funds may feel less inclined to negotiate for better working conditions?