Time for Attention: Economic Outlook, Labor Changes and the Need to Rethink Plans

1. A new scenario calls for new decisions
Brazil’s business environment is ending 2026 marked by economic and regulatory challenges that call for greater caution, adaptability and planning from companies.

The cost of credit, pressure on cash flow, indebtedness and swings in the economic outlook make investment, hiring and expansion decisions harder. At the same time, rising defaults and judicial reorganization filings show the difficulties companies of different sizes and sectors face in preserving their margins and keeping their operations running.

In this context, reviewing expenses and structures is no longer just an efficiency initiative and becomes part of the business continuity strategy. The cost of labor is at the center of this equation: it is one of companies’ main expenses, and every change in labor rules alters the planning of working hours, hiring and investments.

ℹ️ The challenge, therefore, goes beyond absorbing new costs. Companies need to understand how economic and legal changes affect their operations and identify in advance which adjustments are needed to preserve competitiveness and reduce risk

2. New Labor Rules

A. What Is Already in Force
Constitutional Amendment No. 141/2026, promulgated on October 16, reduces the maximum workweek from 44 to 40 hours and establishes the 5×2 schedule, with no salary reduction. The transition is short: starting December 15, 2026, the 5×2 schedule, with two weekly rest days, and the 42-hour weekly limit take effect, with no salary reduction. On the same date, clauses of collective agreements and conventions that are incompatible with the new text lose effect. The 40-hour limit arrives in December 2027.

Given the short deadline, the National Confederation of Commerce of Goods, Services and Tourism (CNC) filed, on November 3, a Direct Action of Unconstitutionality (ADI) 8.041 with the Federal Supreme Court (STF), with a request for a preliminary injunction, seeking postponement of the new working-hours schedule. The entity asks that the first stage, of 42 weekly hours and two rest days, take effect in October 2027, and the 40-hour limit in October 2028. On November 5, Justice Flávio Dino, the rapporteur of the case, denied the requested preliminary injunction and scheduled a conciliation hearing for November 10, 2026. Thus, unless a decision to the contrary is issued, the schedule set out in the amendment remains in force.

The amendment allows compensation regimes other than 5×2 to be established by collective agreement or convention, which gives collective bargaining a leading role. Regulation is still pending, through a decree being prepared by the government, which will list the activities that may keep differentiated regimes, such as healthcare, security, transportation and urban cleaning, and an ordinance with implementation guidance. As of the date of this bulletin, neither had been published.

For a full overview of Constitutional Amendment 141, see our article End of the 6×1 Schedule: What Changes and How Companies Should Prepare .

In the courts, the recent position of the Superior Labor Court (TST) deserves attention. In October, it established Topic 316, with binding effect, validating a collective rule setting the 220 divisor for 40-hour workweeks, which should ease the impact of the new working hours on overtime and other amounts calculated on an hourly basis.

Another important change in labor relations is the update to Regulatory Standard No. 1 (NR-1), which has also been in force since May 26, 2026. It requires companies to include psychosocial risks, such as excessive demands and harassment, in their occupational risk management, with documented technical assessment and preventive measures.

In Claim of Non-Compliance with a Fundamental Precept (ADPF) 1,316, the Federal Supreme Court (STF) maintained the suspension of fines and other penalties related to the psychosocial risk factors under NR-1, extended for another 90 (ninety) days by a decision of September 24, 2026. Subsequently, on October 13, 2026, the STF ordered the suspension, for 60 (sixty) days, of the proceedings discussing the matter, to allow for deeper technical discussion. These decisions do not remove companies’ obligation to manage psychosocial risks, nor do they prevent labor inspectors of the Ministry of Labor and Employment (MTE) from continuing their inspection activities, including by issuing recommendations, advisory notices and other non-punitive measures.

For a full overview of the NR-1 updates, see our article NR-1 and Psychosocial Risks: From Concept to Practice.

B. What Is Under Discussion
In addition to the changes already in force, there is a broader labor agenda in Congress and in the courts. These are topics approved by one of the houses or still pending judgment, which may affect how companies hire, manage working hours and benefits, define internal policies and negotiate with the unions of professional categories.

Labor Radar

Topic	What is at stake	Áreas afetadas	Areas affected
In the National Congress
PDL 997/2026 ILO Convention 190	Expands the duty to prevent violence and harassment at work, with effects on internal policies, reporting channels and training.	Work environment · Internal policies	Pending. Approved by the Chamber of Deputies on September 1, 2026; awaiting the Senate.
PDL 996/2026 ILO Convention 156	Equal opportunities and treatment for male and female workers with family responsibilities. Tends to encourage work-family balance policies.	Terminations · Internal policies	Pending. Approved by the Chamber of Deputies on September 1, 2026; awaiting the Senate.
PL 2.015/2025 Mental health at work	Amends the CLT (Consolidation of Labor Laws) to require employers to consider psychosocial risks in the planning and organization of companies.	Health and safety · People management	Pending. Awaiting approval by the Chamber of Deputies.
In the Federal Supreme Court
Topic 1.389 Pejotização (engaging individuals as legal entities)	Validity of contracting legal entities and independent contractors, jurisdiction of the Labor Courts and burden of proof of fraud.	Hiring	Under judgment. Judgment pending; lawsuits are proceeding in the labor courts, with appeals suspended in the Regional Labor Courts (TRTs) after the regional judgment is issued and before the deadline for an appeal on points of law (recurso de revista) opens.
In the Superior Labor Court
IRR 210 Positions of trust (Art. 62, II, CLT)	Whether the minimum 40% premium can be measured against overall pay or requires a separately stated bonus.	Working hours · Pay	Under judgment. Judgment pending.
IRR 204 Treatment for occupational accident or illness	Whether the cost of treatment lasts until recovery or for life, and whether it includes maintaining the health plan.	Health and safety · Benefits	Under judgment. Judgment pending.
Topic 92 Night shift premium	Whether the premium applies to extended hours after 5 a.m. and whether a collective rule may limit it.	Working hours · Pay	Under judgment. Judgment pending. Appeals on the topic are suspended in higher courts and TRTs.
Topic 93 Transfer premium	Whether a temporary transfer, which gives rise to the premium, can be defined by its duration alone.	Pay · Mobility	Under judgment. Judgment pending. Appeals on the topic are suspended in higher courts and TRTs.
IRR 149 Extended hours in unhealthy environments	Whether a collective rule waives the prior license from the competent authority required by Article 60 of the CLT.	Working hours · Collective bargaining	Under judgment. Pendente de julgamento.
IRDR 1 “Mutual consent” in collective labor disputes	The thesis that allowed a collective dispute in the face of an arbitrary refusal to negotiate had its effects suspended by an STF decision.	Union relations	Under review. Under review at the TST.
In the Regional Labor Court of the 2nd Region (São Paulo)
IRDR 19 Apprenticeship quota	Whether a collective rule clause is valid if it excludes, reduces, replaces or changes roles within the calculation base of the apprenticeship quota (Article 429 of the CLT).	Hiring · Collective bargaining	Under judgment. Admitted on August 13, 2026; second-instance appeals suspended.

Because the theses established by the STF and the TST are binding and also apply to ongoing cases, following this agenda closely makes it possible to anticipate adjustments, assess the practical and financial impact of each change and decide with confidence, rather than merely react.

ℹ️ The central point is not just to comply with each new requirement in isolation, but to understand their combined effect on the cost structure, the organization of work and the company’s legal certainty.

3. Preventing Liabilities And Restructuring Safely

In a scenario of cost pressure and changing labor rules, labor liabilities tend to originate in details: inadequacies in working hours, failures in applying collective rules, outdated contracts and organizational changes implemented without proper legal analysis:

a.1. Employees exempt from time recording
The constitutional exception (EC 141/2026) covers only those with a college degree and a salary of at least 2.5 times the General Social Security Regime (RGPS) ceiling. Broader exemptions provided for in contracts or collective rules tend to be challenged, and without working-hours records the company’s defense is weakened.

2. Time banks and compensation agreements
Arrangements agreed on the basis of the 44-hour workweek need to be reviewed. Collective clauses incompatible with EC 141/2026 lose effect in December, and the excess hours may be claimed as overtime.

3. Outsourced companies
Service providers also need to adapt, and the contracting company is secondarily liable for whatever they fail to comply with. In fixed-price contracts, requests for economic rebalancing are expected.

4. Contracts with legal entities and independent contractors
While the STF has not decided Topic 1,389, lawsuits have resumed in the labor courts and TRTs. Reviewing contracts, how services are provided and the supporting documentation reduces the risk of a finding of an employment relationship.

5. Managers and positions of trust
IRR 210 may redefine the requirements for those covered by Art. 62, II, of the CLT. It is worth checking now whether the function bonus is separately stated and whether the pay structure holds up.

6. Mental health, harassment and illness
NR-1, Convention 190, PL 2,015/2025 and IRR 204 all point in the same direction: greater attention to preventing psychosocial risks and to the costs of illness. Prevention policies, reporting channels and absence management also become cost management.

4. How To Proceed?

Preventive legal audits, with personalized work integrated with other practice areas and tailored to the needs identified, aimed at reviewing working hours, contracts and collective instruments, reorganizing teams, examining labor costs and planning the legal side of restructurings for the reality of each business, are certainly a differentiating element for coordinated decisions that consider both legal certainty and the company’s operational and financial objectives.

The time is one of reviewing, planning and acting with caution. Anticipating labor risks and evaluating alternatives before implementing changes allows for more informed decisions, reduces exposure to liabilities and contributes to the sustainability of the business.

Our Labor Team at Araújo e Policastro Advogados is available to discuss the reality of your company.

Authors:

Ana Lúcia Pinke Ribeiro de Paiva – apinke@araujopolicastro.com.br

Alexandra Rosman Scaramel – ascaramel@araujopolicastro.com.br