News Summary

• The Provisional President Decree (MP) for Economic Freedom that instituted the possibility of the so-called “timecard exception” in the employee attendance record was approved by President Jair Bolsonaro.
• This model establishes that workers and companies only record the exceptions to regular work hours or rather when the work hours were longer, shorter or in a different period than that provided for in the employment contract. The use of this practice must be authorized in individual or collective written agreements.
• Before using the model, companies must study ways to control the “exceptions,” avoid unpleasant surprises in court and even reflect on whether the new costs offset the economy with the bureaucracy of the timecard record.

The famous expression “punching the clock” denotes the activity that is part of the routine of millions of workers in Brazil to record daily work hours. Over the years, the practice has been adjusted to new technologies and different formats have been used, such as time clocks and electronic record systems, in addition to the traditional notebooks. Originating from the so-called “MP for Economic Freedom,” Law 13.874/2019 brings what has the potential to be the big change in the last decades to this segment: the possibility of using a “timecard exception” record. This is a practice in which workers and companies would only be required to register exceptions or the hours different from those provided for in the employment contract.

What does it mean? Let us suppose that an employee works at a company from Monday to Friday, from 9am to 6pm. On days when this schedule is met, when the worker starts at 9am and leaves at 6pm, nothing would need to be recorded.

On the other hand, if a day of work is extended until 7pm, for example, such an exception would have to be recorded.

Is it already in effect? Yes, the legal provision is in effect as it has already been approved by Congress and signed into law by President Jair Bolsonaro. However, for the legal provision to be

applied by the new law, there must be an “individual written agreement, a collective labor agreement or collective-bargaining agreement.”

The legislation also went further in the case of companies with less than 20 employees. These are exempt from having a timecard. Before, this flexibility was valid for legal entities with up to ten employees.

What changes for the worker? 6 Minutos listened to Caio Madureira, a member of the labor division of law firm Tortoro, Madureira & Ragazzi Advogados. For the specialist, the main practical change is in the legal area of the issue in which cases end up in the labor courts.

To understand the impact, let us return to the example above. Let us suppose that the worker has ten days with hours beyond the registered hours but claims to the court that he actually worked more than the agreed in 20 days. The difference would be because the employer coerced the employee not to punch in, in order to pay less overtime.

What must the judge do? Lawyers will certainly face this conflict and criteria will be defined in future decisions of the TST (Superior Labor Court). At first, the importance of the employee gathering evidence of the completed work hours increases, according to the lawyer’s review.

“As the law required the company to keep records, the company is given with the burden of providing proof. With the timecard exception, it is the employee who will have to prove what really happened,” he explains. In the list of possible forms of evidence, in addition to the traditional ones such as witnesses and communications, other items must be provided more and more through technology, such as with WhatsApp messages.

“We see in the labor court a dispersion of evidence. This shall grow with the loss of timecard recording. If the message shows that the continuity of the provision of service to the employer has been maintained, it can be considered an extension of the work hours,” says Madureira.

Therefore, the first change is the risk of conflicting versions of events in which the parties use the most diverse means to prove the account they have submitted. It is important to remember that since the labor-law reform of 2017 the so-called “negotiated over the legislated” gained strength – in other words, what is written in the individual or collective agreements between employers and employees is more important than the law.

And for the companies? Employers must stay alert in relation of what has already been happening with the so-called ponto britânico or ‘British timecard’. It comes from the famed punctuality of the British and the expression is used to describe how the timecard record’s precision is almost unbelievably perfect.

Getting back to the case of the fictitious employee in the previous items. It is difficult to imagine that they come to work daily at 9:00am (not 8:59am or 9:01am) without any variation and leaves at 6:00pm (not 5:55pm or 6:05pm) with the same precision.

This type of timecard record, also called “gabarito” (answer key), as it contains all the correct answers, is sometimes considered fraudulent and completely invalidated by the courts. Because,

if the worker can prove with month after month of identical time sheets that they worked 10, 20, 30 days different from what was recorded, what is the legal value of that record?

It is this precept that companies should be aware of as it also applies to the “timecard exception.” If the company has a record of 10 days of overtime for a worker who sues the company charging them for 20 and this former employee manages to prove 18 days, why would the judge dismiss the entire, alleged 20-day version of the employee?

In this scenario, the burden of proof is once again reversed with the company needing evidence that refutes the former employee’s allegation under penalty of being forced to pay for everything that is alleged against the company.

So, is the “timecard exception” a con? Not necessarily. Despite having many gaps, a detailed regulation in the individual and collective agreements that institute this model can guarantee the benefits for companies while avoiding a good part of the problems.

Another important aspect is to understand to whom this type of practice could be recommended. Allowed for any company with more than 20 employees, it can be good for companies with a few dozen employees who benefit from less bureaucracy and personnel management costs. However, the risk goes up considerably for companies with thousands or millions of employees which, in order to compensate for the lack of timecards, need to prepare a complex and sometimes even more expensive exception management systems.