Author: José Pastore *

Source: O Estado de S. Paulo, 07/07/2009

The National Congress took an important step to reduce the informality of self-employed people, by approving Complementary Law 128/2008, which refers to the individual microentrepreneur (MEI).

Brazil has more than 10 million people working on their own and without any social protection. By joining the MEI program, these people will enjoy various social benefits, including retirement, pension, accident benefit and sickness benefit.

As a result, they will emerge from the real savagery that is the informal labor market in Brazil. In turn, Social Security will have more revenue. It is a device that protects workers and public finances.

The program is aimed at those who earn up to R $ 36 thousand per year. The vast majority of self-employed workers fall into this range, such as bricklayer, painter, electrician, plumber, antenna, manicure, barber, gardener, craftsman, trucker, carpenter, accountant, dressmaker, mechanic, shoemaker, locksmith, taxi driver, school transporter, street vendors and the like.

The cost of obtaining social security protections is a real bargain. Regardless of the income earned, the MEI participant will pay INSS R $ 51,15 per month and, when applicable, R $ 5 of ISS and R $ 1 for ICMS. In total it is only R $ 57,15 monthly. For those who earn, on average, R $ 3 thousand per month, we are convinced, these are quite tolerable expenses. And all without bureaucracy.

This measure opened an excellent opportunity for people to achieve a very attractive social benefits package. They currently have nothing.

There is an important innovation. The program enshrines the concept of “partial protection”, which is essential to reduce informality. As R $ 57,15 is insufficient for full social security coverage, such taxpayers will be entitled to retirement due to age, accident and disability, but not due to contribution time.

This is realistic. If conditions do not guarantee total protection - which costs companies 102,43% of their salary - the new law guarantees limited retirement and the various social security benefits.

But protection can be even better. The project has the virtue of portability. Today protections are tied to employment, not people. For example, only those who were formally employed have direct access to unemployment insurance. Only those who have a registered work permit are entitled to the severance pay.

With the new system, it is people who have protections, not jobs, not least because they have no jobs. Those who go from being self-employed to employed, or vice versa, will carry with them the protection they have acquired. Even as a self-employed person, if he / she wants to retire for a period of contribution, this person can start making a larger contribution to the INSS and gradually move towards retirement faster.

More: MEI participants can have an employee who earns a minimum wage or the floor of the category. This is very good, as the employee and his family will also be protected.

Having addressed the problem of self-employed workers, parliamentarians paved the way for reaching Simple Labor, aimed at those who work as employees in small and micro enterprises, which will further raise the level of formalization.

Therefore, there is no need for radical changes or constitutional reform. Small adjustments in ordinary laws can make a Simple Labor possible for 15 million employees who today live in helplessness, for working without a formal contract in small and micro companies in urban areas and in properties in the countryside.

Small and micro-enterprises have already received different treatment in the tax and social security fields. The same type of treatment is now lacking in the labor field.

This is the focus of Simples labor. With this, Brazil will be inaugurating a decisive march towards the so-called decent work (expression coined by the ILO) and in the reduction of informality, which currently affects more than 50% of our workforce.

* José Pastore is professor of labor relations at the University of São Paulo Site: www.josepastore.com.br