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Associates Blog

What is Labor Compliance and Why is it Essential for Businesses?

25 de dez de 2024

3 min read

By Liz Viana, Labor Law Department.

Supervised by Dr. Priscilla Rosas.



The term compliance originates from the English verb “to comply”, meaning “to be in compliance” or “to act according to rules.” In the corporate environment, compliance refers to a set of practices ensuring that a company adheres to laws and regulations, promoting a culture of ethics, transparency, and accountability. A compliance program aims to ensure that the company’s activities align with applicable standards, minimizing risks and avoiding losses.


In the context of labor relations, labor compliance involves implementing internal policies to prevent violations of labor laws while managing risks related to employees’ health, safety, and well-being. These measures protect both the company and its employees by ensuring that rights and responsibilities are upheld, fostering a trustworthy and ethical work environment.


Why Invest in Labor Compliance?


A labor compliance program goes beyond mere legal compliance. It involves ongoing monitoring and proactive strategies to prevent issues such as administrative penalties, labor liabilities, and lawsuits. Furthermore, a well-executed program can reduce employee turnover, boost productivity, and enhance the company’s overall image.


Key actions for successful labor compliance include creating a Code of Conduct, consistently monitoring risks, conducting regular employee training, and establishing whistleblower channels that encourage transparency to combat potential non-compliance. Proper application of disciplinary measures is also essential to ensure that internal procedures are followed.


In today’s competitive environment, labor compliance has become a strategic tool, preventing disruptions in business activities caused by litigation or regulatory issues. Moreover, it serves as a critical differentiator, demonstrating the company’s commitment to social responsibility, ethics, and the well-being of its employees.


Laws Supporting Labor Compliance


Although there is no single piece of legislation that fully defines labor compliance, it is inherently linked to various legal norms governing labor relations in Brazil. Below are some key laws:


Labor Reform Act (Law No. 13,467/2017)


The Labor Reform introduced significant changes to the Consolidation of Labor Laws (CLT), making negotiations between employees and employers more flexible. Labor compliance ensures that these new rules are followed, safeguarding the rights of all parties and avoiding disputes.


Anti-Corruption Law (Law No. 12,846/2013)


This law establishes corporate liability for acts of corruption. In labor compliance, this includes ensuring that company practices adhere to this law, preventing any illegal or unethical behavior within the organization.


Outsourcing Law (Law No. 13,429/2017)


The Outsourcing Law allows companies to hire outsourced services in any area. Labor compliance ensures that all hiring practices comply with this legislation, protecting the rights of outsourced workers and the company alike.


Money Laundering Law (Law No. 9,613/1998)


This law addresses the prevention of concealing assets and values obtained illegally. Labor compliance ensures that the company’s partners and investors comply with this law, mitigating the risk of involvement in illicit activities.


General Data Protection Law (LGPD – Law No. 13,709/2018)


The LGPD mandates that companies protect their employees’ personal data. Labor compliance includes developing policies and training programs to ensure data security, preventing data breaches and other incidents that could compromise employees’ privacy.


Conclusion


Labor Compliance is an indispensable tool for ensuring legal compliance and promoting a safe and ethical work environment. It protects companies from legal risks and strengthens relationships with employees, directly impacting productivity and long-term success.


Beyond meeting legal obligations, a strong labor compliance program is a competitive advantage that contributes to the company’s sustainability and reputation in the marketplace.


Source: Manual do Compliance Trabalhista: Teoria e Prática, 4th Edition.