Developed at the end of 2014, eSocial is a joint initiative of the Secretariat of the Federal Revenue of Brazil – RFB, National Institute of Social Insurance (INSS), Caixa Econômica Federal (the bank in charge of FGTS payment) and the Ministry of Labour.
The objective was to build another instrument of the Union that would enable centralizing the entire process of providing information regarding social security, taxes and labour obligations related to the Human Resources and Payroll environment – including rural production. In this way, the government broadens its channels for data collection without demanding adjustments to specific legislation. Which implies that eSocial is also part of the Public System of Digital Bookkeeping (SPED), being one of the arms of this great program destined to the relationship between taxpayers and the IRS.
It is important to highlight that from its beginning the eSocial is not a new obligation, but a simpler and sophisticated way of communication with the revenue authorities.
The entire system is digital, which brings greater agility when transmitting, validating, storing and distributing these data through the Brazilian territory. In addition, its implementation promotes the guarantee of social security and labour rights, eliminating redundancies of information and improving the quality of data on employment.
Consequently, the main target of this project is to turn things less bureaucratic. These measures simplify the payment of bonds, reducing manual processes and centralizing communication with different organs.
Changes that will bring benefits to your company’s routines and society
We can affirm that the main change that eSocial brings is the migration of the companies and the revenue authorities communication to a digital format. Consequently, data that was once supposed to be physically stored for long periods are going to be send in real time. Everything will be stored in a public environment, completely secure, without resulting in infrastructure expenses for companies.
What will be the changes caused by eSocial to companies, professionals and society?
eSocial simplifies numerous payroll processes, bringing greater performance in the productivity of companies and considerably reducing the possibility of errors when calculating and generating the receipts for collecting the FGTS, INSS, DARF and other taxes. Consequently, there is a greater assurance of conformity in the legal aspect.
However, for companies, this will not be the biggest change. The biggest revolution of eSocial is bringing a new way of declaring events on the part of companies. Information that was previously send monthly and yearly to the Government, in large amount of information and through different channels, will now be quickly sent right after the event occurred.
In other words, whenever there is a labour occurrence (we will see more about this below) there will also be an immediate record of the information about the employment bond. For example, vacation, hiring and termination. With eSocial, these events will be send straight away to all the organs involved, RFB, Ministry of Labour, Caixa Econômica and INSS.
Definitely, for the workers, the main advantage generated by eSocial will be the effective and transparent guarantee of their labour and social security rights linked to their employment contracts.
This level of security is applicable to any type of labour relation in Brazil. Employees under CLT (Consolidation of Labour Laws) laws, individual taxpayers, cooperative, statutory, self-employed, trainees and workers with no employment relationship will have their information sent to eSocial.
Therefore, in the social aspect, in addition to the benefits generated in the lives of companies and workers, eSocial also contributes to a healthier and effective decision-making on public policies.
Deployment schedule: At what point are we?
The implementation schedule of eSocial is very clear about obligations, and deadlines. Simply put, all contractors (individuals or corporations) of service providers who have any labour, tax or social security obligations are obliged to submit information regarding this link to eSocial. With this in mind, since January 2018 the implantation has been divided into five phases:
Large companies ¹
Other companies ²
|1st phase: Registration of the employer and tables||2018||2018||2018|
|2nd phase: Workers ‘ data and their links with companies (non-periodic events)||2018||2018||2019|
|3rd Phase: Payroll||2018||2018||2019|
|4th phase: Substitution of GFIP (Social Security Information Guide)||2018||2019||2019|
|5th phase: Occupational Safety and health data||2018||2019||2019|
During the first semester of 2018, the main target was the big companies with revenues exceeding R$78 million/year. The other private institutions in the country, including micro, SMBs (small and medium business) and MEIs (micro Individual entrepreneur) who have active employees will begin to send the information on July 2019. Now, we are entering the final steps of the implantation, with the end of the 4th phase and the beginning of the 5th phase starting from beginning until middle of 2019.
Which legal obligations are going to be replaced?
eSocial will make less bureaucratic 15 activities related to the Brazilian Payroll process, channelling and gradually replacing the following obligations:
- GFIP- FGTS gathering and Social Security information guide
- CAGED – General registration of employees and unemployed to control admissions and dismissal of employees under the CLT regime
- RAIS – Annual relationship of social information.
- LRE – Employee Registration book
- CAT – Occupational accident communication
- CD – Dispensing communication
- CTPS – Labor portfolio and Social security
- PPP – Professionsiographic Profile Social Security
- DIRF – Withholding Income tax statement
- DCTF – Statement of federal tax debts and credits
- QHT – Working time frame
- MANAD – Digital files normative Manual
- GRF – FGTS Pickup Guide
- GPS – Social Security Guide
Deadlines, fines and penalties to watch out.
The penalties for companies that fail to comply with the rules and deadlines of eSocial do not change a lot in relation to the models of their predecessors. It occurs that companies must adapt to the processes of eSocial by following the rules of the project, as their events are required.
That way, in the face of legal particularities, it will not allow the companies to send retroactive events, as in the case of vacation and termination, for example.
The legal deadlines of eSocial for each non-periodic event can be seen below:
|Event description||Shipping Time|
|Registration worker Admission-Preliminary||1 day before the start of the worker’s activities.|
|Worker Admission||The day before the beginning of the worker’s activities or until day 07 of the subsequent month, if there is S2190.|
|Worker without bonding start||Until day 07 of the month later or before sending S1299 – closing.|
|Alteration of employee registration data||Until day 07 of the month later.|
|Change of employment contract||Until day 07 of the month later.|
|Occupational accident Communication||First business day after the occurrence.|
|Worker Health Monitoring||Until day 07 of the month later.|
|Environmental conditions of labor risk factors||Until the day 07 of the month after the start of activities in environment with exposure.|
|Unhealthy, dangerousness and special retirement||Until the day 07 of the month after the start of activities in environment with exposure or when it lives the additional.|
|Notice||Up to 10 days after notification notice.|
|Reintegration||Until day 07 of the month later and before sending S-1200-remuneration|
|Shutdown||Up to 1st business day following shutdown when there is warning worked. Up to 10 days after shutdown and before sending S-1200-remuneration|
|Worker without bond contractual amendment||Until day 07 of the month later or before sending S1299-closing|
|Worker without bond termination||Until day 07 of the month later or before sending S1299-closing|
|deleting events||Whenever it is necessary to exclude an improperly included event, with exclusive permission to non-periodic and periodic events.|
|Request for totalizing events, Bases and contributions||P/Current movement at any time after opening the movement and for the previous period at any time.|
What happens if your payroll loses any of the delivering deadlines?
Each event has their particularity when we talk about sanctions and fines. Some events have lower fines, while others can reach the four-digit home. Check penalties for the event:
Professionals exercising unregistered activities may imply fines of R $3,000.00 or R $6,000.00 in cases of recurrence. ME/EPP has a fine of R$800,00.
Fines for non-delivery of requests for a shutdown within 1 business day result in a fine equivalent to 1 professional salary.
The excess hours in the working day, rest interval of fewer than 11 hours and the non-dispatch of medical ATMs are in a fine of R $37,83 per professional and may double in case of recurrence or contempt.
Position adjustments and remuneration
These events must be sent in the month preceding the term and may result in a penalty of R$402,54 per professional with incorrect information.
Updating of data
Professionals with incorrect or outdated eSocial data imply fines of R$402,54 per employee.
in addition to sending events within the period of the eSocial, no professional is allowed to receive holiday values and continue working. Fines vary between R$10.64 and R$106,41 per professional exercising activities during the holiday period. R$170.26 for unreported holidays.
Temporary leave events are not always sent in the month of the occurrence. Professionals away for more than 30 days should undergo a medical examination, validating their return. The penalty for breach may vary from R$1.812,87 to R$ 181,284,63, with determination established by the Ministry of Labor.
The deadline for sending to the CAT (Communication of Occupational Accidents) should be the same. CAT performed with a delay or incorrect may imply fines of R$402,54.
All examinations as periodicals, admission, return to work, changes of functions or disconnections should be performed according to each scenario. Failure to comply with these rules implies fines between R$402,43 and R$4,025.33.
Payments payroll processes should be considered as points of attention, since in addition to the need of sending information according to the calendar year of closing the sheet, errors may imply a fine of R$1,812.17. Also, it is worth remembering that reprocessing can be interpreted as errors.
Recommendations to align your workflows into eSocial time
To recap a little, eSocial brings with it new rules and procedures, but not practical changes in the payroll routine of any business sector.
In addition to the work of sanitation of the cadastral information of all employees of your company, we recommend a closer relationship between the payroll team and the HR Department, observing the Office routine and ensuring the delivery of all events required by eSocial.
Here at Neointelligence, we have tailored the procedures, so together with our customers; we can ensure all deliveries with full effectiveness. We had established a relationship routine with our clients to meet the eSocial schedule, as shown below:
|Labor events||Shipping deadline for Neointelligence|
|CLT Employee Admission||2 working days before the start of the contributor|
|Employee registration without bond (Pró-labore/Trainee/autonomous)||2 working days before starting employee activities|
|Alteration of cadastral information||Contributor sheet closing deadline|
|Change of contractual information (salary, function, department, etc.)||Contributor sheet closing deadline|
|Temporary clearance less than 15 days (maternity leave, sickness assistance, vacations, etc.)||Contributor sheet closing deadline|
|Temporary clearance exceeding 15 days (maternity leave, sickness aid, vacations, etc.)||24 working hours after the occurrence|
|Previous notice worked by employer or employee||Up to 5 calendar days after the notification made by the employee|
|indemnatated notice/resignation/termination of contract||Up to 5 calendar days after request for employee shutdown|
|Contract termination (pro-labore/autonomous/Trainee)||Contributor sheet closing deadline|
|Source: MOS (Manual of eSocial Guidelines)|
It is very important to be within the deadlines and routines of eSocial. A project with more than R$ 100 million in investments and with a clear prospect of innovating and revolutionizing the relationship among Revenue authorities vs company vs. worker now enters its final line of implementation.
To do so, relying on an expert, definitely, guarantees a better clearness regards labour, tax and social security routines. A tailored process will also be helpful to find the best ways of avoiding fines and sanctions. With this, your company will be more than prepared with the management of its professionals and a better communication with eSocial.