New minimum wage of R$1,412 comes into effect this Monday; understand what changes

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Adjustment of almost 7% applies to salary and benefits for January, which will be paid at the beginning of February. New legislation provides for the minimum to rise in line with inflation and rising GDP. Minimum wage should rise to R$1,412 from January The new national minimum wage, of R$1,412, will come into effect from this Monday (1st). The value represents an increase of almost 7% (R$92 more) compared to the R$1,320 valid until December 2023. The calculation had been anticipated by g1 and inserted as a forecast in the 2024 Budget. The decree signed by the president Luiz Inácio Lula da Silva (PT) was published last Wednesday (27). With the new value, those who receive the minimum wage (or multiples thereof) or benefits linked to this value — such as unemployment insurance and the Continuous Payment Benefit (BPC), for example — will already receive the adjusted total at the beginning of February. Understand below how the minimum wage works, what changes with the new value and what the adjustment rule is. How does the minimum wage work? As the name already indicates, the minimum wage is the lowest remuneration that a formal worker can receive in the country. The Constitution says that urban and rural workers have the right to a minimum wage, fixed by law, nationally unified. This amount must be capable of meeting basic vital needs — such as housing, food, education, health, leisure, clothing, hygiene, transportation and social security — and must have periodic readjustments that preserve its purchasing power, “its link to any purpose.” In other words: according to the Constitution, the minimum wage has to be readjusted at least for inflation, to guarantee the maintenance of the so-called “purchasing power”. If inflation is 10%, wages have to rise at least 10% to ensure that it is possible to buy, on average, the same products. In the governments of Michel Temer and Jair Bolsonaro, the adjustment of the minimum wage followed exactly this rule. It was adjusted only for inflation, without real gain. According to information released in May by the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese), the minimum wage serves as a reference for 54 million people in Brazil – one in every four Brazilians. Dieese also calculates that 22.7 million people are directly affected in their pockets by the minimum wage level. In addition to workers who, by contract, receive a minimum wage (or multiples of the minimum wage), there are also pensions and benefits such as the Continuous Payment Benefit (BPC) linked to the same value. The minimum wage also generates indirect impacts on the economy, such as increasing the “average salary” of Brazilians and increasing workers’ purchasing power. What changes with the new minimum wage? The new minimum wage, which will be R$1,412 from January 1, 2024, also increases the value of benefits and services that use the national minimum wage as a reference. As a result, anyone who receives the national minimum wage (or multiples thereof) or benefits linked to this amount should already receive the adjusted total at the beginning of February. Therefore, they must have higher values: PIS/Pasep salary bonus; benefits from the National Social Security Institute (INSS); Continuous Payment Benefit (BPC); unemployment insurance; the values ​​that allow registration in the Single Registry; defense insurance; the amounts paid for intermittent work; the ceiling allowed for filing lawsuits; monthly contributions from Individual Microentrepreneurs (MEIs). Salary bonus, CadÚnico, unemployment insurance: see what changes with the minimum wage of R$1,412 How did the government arrive at R$1,412? If it simply complied with the Constitution’s rule of correcting the value for inflation, the government could readjust the minimum wage from the current R$1,320 to something around R$1,370.82. The calculation takes into account inflation measured by the National Consumer Price Index (INPC) in the 12 months up to November, which was 3.85%. The Lula government, however, promised during the campaign that it would resume the so-called “minimum wage appreciation policy”, which means increases beyond inflation. In August, Congress approved a provisional measure issued by Lula in April and included this mechanism in the law. Under the new rule, the adjustment of the minimum wage takes into account two factors: inflation measured by the INPC until November, as provided for in the Constitution; the real growth rate of the Gross Domestic Product (GDP) of the previous two years. As a result, in addition to the 3.85% inflation, the minimum wage in 2024 will grow by 3% (real gain) equivalent to the GDP expansion in 2022. *With reporting by Mateus Rodrigues and Ricardo Abreu

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