international employment law firm alliance L&E Global

Brazil: Key Aspects of the Accident Prevention Factor applicable in 2022

The benefits granted by Social Security to employees, who suffer accidents during the performance of their activities, are funded by a contribution called GILRAT, which is annually altered by the application of the so-called “Accident Prevention Factor” (FAP), which can reduce said contribution by half or increase it by up to double the amount.

This index is annually provided in late September by the Ministry of Economy. Thus, the index that will apply for 2022 was only recently released. The index is calculated for each company’s establishment considering the frequency, severity and costs associated with accidents at work, occurring between the two years prior to its disclosure and based on the enterprise’s accident performance as compared to other companies that have the same economic activity (e.g., for the 2022 index of (issued in September 2021) events that occurred in 2019 and 2020 are to be considered).

It is not uncommon to find mistakes in the calculation of said index, such as the inclusion of employees’ work absences that do not characterise a work accident, absences of employees no longer connected to the company, absences that did not generate the granting of a benefit by the National Institute of Social Security, among other reasons, which why it is highly recommended that companies check the indexes provided each year and challenge them in case any inconsistency is found.

Nonetheless, as the FAP rules of calculation methodology are particularly controversial, several companies that have previously questioned said aspects before the judiciary and the Superior Courts, will now define whether they are valid or not.

For example, a decision by the Federal Supreme Court (STF) regarding the constitutionality of the methodology issued by “Conselho Nacional de Previdência Social” (a government agency related to the National Institute of Social Security) is anticipated for early-November 2021.

Unfortunately, the STF Ministers are expected to validate the methodology issued by “Conselho Nacional de Previdência Social”, which only reinforces the need for companies to keep ensuring the investments in occupational accident prevention, in order to avoid being “punished” by a higher FAP index.

As the 2022 FAP index was provided this past September, companies will therefore be able to challenge any inconsistencies starting from 1 November 2021 until 30 November 2021.