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By Ed Taylor
June 1—The release of individual companies' workplace safety records will give employers grounds to challenge the calculation of their accident insurance liability, attorneys say.
In 2010, Brazil's social security ministry introduced a new formula to determine how much individual companies have to pay for mandatory work accident insurance. The calculation applies an accident prevention factor ranging from 0.5 percent to 2 percent to the company's accident insurance premium of 1 percent to 3 percent of payroll. What accident prevention factor is applied depends on the employer's safety record. Companies with particularly bad safety records could be required to pay the maximum premium of 6 percent of payroll, double the maximum they could have been charged before implementation of the 2010 law.
Not surprisingly, companies have challenged the use of the accident prevention factor in calculating their insurance premiums.
When the accident prevention factor was first applied in 2010, the government estimated that only 7.6 percent of Brazil's firms would have an increase in their work accident insurance as a result of the policy. In fact, according to a National Confederation of Industry survey, over half the nation's employers saw their accident insurance premiums increase. This led to an avalanche of lawsuits challenging the constitutionality of the calculation used by the government, most of which, according to attorney Alessandro Mendes Cardoso of the law firm Rolim, Viotti & Leite Campos, focused on the lack of transparency in the government's calculation of the accident prevention factor.
In May, the labor ministry began to post on its website the number of accidents reported by individual companies, which company lawyers say will allow them to compare accident records between firms in the same sector and put them in a better position to challenge the accident prevention factor assigned their clients.
“Comparing accident records with other companies in the same sector will assist firms discussing accident prevention factors they feel are wrong,” Cardosso said. “There are lawsuits seeking the opening of this information that the ministry is now making available.”
Occupational health and safety director Marco Perez warned that the number of accidents is only one of three criteria used to calculate a company's accident prevention factor. The other two are the seriousness of the accident and its cost to the employer.
“Only the number of accidents is being revealed,” Perez said, “and there are other factors that determine the level of a company's accident prevention factor.”
Brazil's supreme court has yet to rule on any of the lawsuits challenging the constitutionality of the accident prevention factor.
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For more information on Brazilian HR law and regulation, see the Brazil primer.
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