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By Ed Taylor
Jan. 21— Brazil's tax department altered its policy regarding the calculation of employer job accident insurance rates Jan. 5, the second time in two years it has done so.
Companies in Brazil are required to pay for accident insurance provided by the social security ministry. The rate for this insurance varies from 1 percent to 3 percent of payroll depending on the degree of risk associated with the work performed.
A 2009 tax department ruling said that for companies with multiple units, the rate for all of them would be that of the unit with the highest rate. This meant that if a company had a unit with a low risk rating of 1 percent and another with a high risk rating of 3 percent, it would have to pay the 3 percent rate for both units.
In February 2014, the tax department issued Normative Instruction 1453 changing this policy and allowing companies to pay separate insurance rates based on the risk level of each unit. Companies were then given the option of a single rate for all units or separate rates for each unit, whichever was more advantageous. The single rate would be based on the rate applicable to the largest number of company employees. If a majority of the company's employees, including all units, had a low risk rating, the single rate would be set at 1 percent.
Now, however, the tax department has again changed its policy, requiring employers to apply separate rates for each unit. This is likely to hurt employers whose overall situation is one of low risk but which have individual high-risk units.
According to attorney Alessandro Mendes Cardoso of law firm Rolim, Viotti & Leite Campos, the most recent decision requires employers to pay careful attention to the operations of each unit to determine their level of risk.
The new rule will also be applied to the calculation of the accident prevention factor on which insurance premiums are based, according to Cardoso, which ranges from 0.5 percent to 2 percent of payroll depending on a company's safety record.
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For more information on Brazilian HR law and regulation, see the Brazil primer.
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