The aspiration for higher earnings, a reduction in working hours, and a shift to a schedule with two rest days rather than just one (i.e. a ‘5×2’ rather than ‘6×1’ schedule) is a legitimate one. However, the approved wording of PEC 4/2025 contains problems for employers that are going unnoticed.  

First, the approved text introduces extra costs that were not disclosed during the legislative approval process. Second, it substantially affects the bargaining process, reducing the impact of the principle that ‘negotiated terms prevail over statutory terms’. The 2017 Labour Reform approved that principle, and the Federal Supreme Court confirmed it.  

There was a widespread expectation that PEC 4/2025 would progress before Brazil’s general election on 4 October 2026. That has not happened, and the proposal remains before the Senate. Nevertheless, if PEC 4/2025 is approved in its current form, employers will need to comply with the new ‘5×2’ shift pattern immediately. Sixty days later, working hours will be reduced from 44 hours to 42 hours, and 12 months after that, to 40 hours. In this article, we examine the problems caused by the approved text and propose a simple fix, in the hope that Congress will take note before the PEC is finally passed. Otherwise, the reform may end up harming the very workers it is meant to benefit. 

The proposed constitutional amendment was first presented in December 2019 and has since then worked its way through Brazil’s legislative process. It seeks to implement the following reforms to Brazil’s working time framework:  

• A reduction of the maximum normal workweek from 44 to 40 hours, to be ‘implemented without any reduction in salary, whether nominal, proportional, or of any other kind’ (as per Article 2 of the approved PEC wording). This prevents a reduction in the hourly wage as a result of the working time changes. 

• The abolition of the traditional ‘6×1’ work schedule. This describes the common arrangement whereby an employee works six consecutive days followed by one day of rest. It would be replaced with a ‘5×2’ work schedule, whereby employees would work eight hours per day, five days per week. There would be two weekly paid rest days.  

• A phased implementation period for the reduction rather than an immediate move to 40 hours. 

Following its approval in May 2026 by the Chamber of Deputies, Brazil’s lower house in Congress, the proposal is now with the Senate for ratification. It may still be subject to amendment.  

The PEC initially proposed reducing weekly working hours from 44 to 36 hours, an 18.2% reduction. Congress later amended this to 40 hours, reducing the cut to 9.1%. This amendment was intended to limit the costs associated with shorter working hours while maintaining employees’ pay. With the reduction to 40 hours, hourly wage costs will increase by 10%, rather than 22% under the original proposal. Those figures do not, however, capture the full cost.

In theory, employers already operating 40-hour schedules with a ‘5×2’ shift pattern would see no change in their costs. In practice though, the approved text increases costs for all employers, regardless of their working hours or shift pattern arrangements.

The problem lies in how the non-reducibility of wages has been set out in Article 2 of the approved text, in the definition not merely of two rest days per week but of a paid weekly rest period, and in the labour divisor.

To calculate an employee’s hourly wage in Brazil, employers divide the monthly salary by a fixed number of monthly hours known as the ‘divisor’. Under current law, most full-time employees work a 44-hour week over six days, with only one paid rest day per week recognised by law, even for employees who actually get two days off (for example, Saturday and Sunday). The second day off is therefore treated, in strict legal terms, as unpaid leave or time worked off through other compensation arrangements. This produces a divisor of 220 (44 hours divided by six working days multiplied by 30 days in the month).

The wording of PEC 4/2025 as approved by the Chamber of Deputies changes this by legally recognising two paid rest days per week for everyone, not just those on a 40-hour, ‘5×2’ schedule. That single change to how rest days are defined and paid is what would drive up costs for every employer in Brazil, regardless of the hours or shift pattern they currently use.

Take an employee earning a monthly salary of BRL 2,200, currently equivalent to an hourly wage of BRL 10 (using the divisor of 220). If the new proposal’s two-paid-rest-day rule takes effect, the divisor increases to 240 hours (40 hours divided by five working days multiplied 30 days). Simply dividing the same BRL 2,200 monthly salary by this larger divisor would produce a lower hourly wage of BRL 9.17, but the proposal expressly prohibits any reduction in hourly pay.

To keep the hourly wage from falling, and avoid any resulting liability, the employer would instead need to raise that employee’s monthly salary to BRL 2,400, a 9.1% increase. Because this results purely from the change in the divisor, it applies to every employer, regardless of the hours or shift pattern they currently operate, or how much they currently pay. The same knock-on effect hits other pay calculated on an hourly basis, most notably overtime. The current 1/6 ratio used to add rest-day pay to overtime becomes 2/5 under Article 2 of the PEC wording approved by the Chamber of Deputies, an increase from 16.7% to 40%.

The scenario the PEC has produced is therefore worse than previously thought. The approved legislation entails additional costs that were not disclosed even to the legislators who approved it, let alone the wider public. However, this is not the only problem with the proposed constitutional amendment approved by the Chamber.

Part of the positive momentum seen in the Brazilian labour market in recent years is due to certain rules introduced by the 2017 Labour Reform. This includes the rule giving negotiated employment terms precedence over statutory employment terms. PEC 4/2025 could undermine parts of this framework and potentially jeopardise the gains they have helped achieve.

The PEC proposes to add wording to paragraph 2 of Article 7 of the Brazilian Constitution stating that, ‘exceptionally, a collective bargaining agreement or convention may […] establish a compensatory arrangement’.

If not properly defined, this wording will end much of the individual bargaining that ordinarily takes place between workers and employers on working-time compensation. Requiring this bargaining through a collective convention or agreement effectively abolishes the individual bargaining currently permitted.

Ultimately, it does not matter what the legislature intended in drafting the proposed text. What matters are the legal effects. As currently drafted, those effects are an increase in the cost of every formal employment contract by at least 9.1%. They also amount to a counter-reform of labour law, increasing legal uncertainty and hollowing out the otherwise successful approach to collective bargaining that has recently prevailed in Brazil.

We believe that Congress should urgently revise the wording of the approved text so as to avoid unnecessarily increasing costs beyond what are already expected. Otherwise, the Brazilian worker, precisely the person the proposals are meant to benefit, will be the one who will bear the consequences.

A simple and painless way to fix part of the problem would be to provide, in the proposed wording of item XV of Article 7 of the Constitution, for ‘a weekly rest period of 2 (two) days, of which 1 (one) is paid and the other must be taken but need not be paid’.

The hourly divisor would then be 200. This results from dividing 40 hours by six days and multiplying it by 30. It would produce a 10% increase in workers’ hourly wages, consistent with the reduction in working hours while maintaining the same monthly salary. This change would not harm anyone nor distort the essence of the PEC. Instead, it would avoid an unrecognised 9.1% cost on all salaries, in addition to the cost of reduced monthly working hours.

Of course, there will still be the 10% increase in hourly wages for those currently on a ‘6×1’ schedule. That increase would have knock-on effects on all amounts calculated by reference to hourly wages, the most significant being overtime pay.

Although PEC 4/2025 is primarily presented as a reform to reduce working hours and replace the traditional ‘6×1’ schedule with a ‘5×2’ model, employers should be aware that the approved wording will have broader consequences than a simple reduction from 44 to 40 hours per week.

As currently drafted, the proposal would increase labour costs even for employers that already operate shorter working weeks or provide employees with two weekly days of rest. The changes would also affect the calculation of hourly rates, overtime and other payments linked to hours worked.

In addition, certain provisions relating to compensatory working arrangements would alter the existing balance between statutory rules and collectively negotiated solutions.

While the proposal remains subject to Senate approval and may still be amended, employers should monitor developments closely, assess the potential workforce and payroll implications, and review any working-time arrangements that currently rely on collective or individual agreements.

*A version of this article was originally published in Valor Econômico. This version is published with permission from the authors. The authors are Fernando de Holanda Barbosa Filho, economist and researcher at the Brazilian Institute of Economics (FGV Ibre), and Luiz Guilherme Migliora, partner at Veirano Advogados, Ius Laboris’ Brazilian member firm. Luiz is also a founding professor at FGV Direito Rio.