Definition
Digital bookkeeping of labor, social security, tax, and fiscal information, amongst others, in respect of the hiring and use of labor with or without the existence of an employment relationship.
Implementation
The implementation of eSocial for employers taxed under the actual profit regime and recording annual income above R$78,000,000.00 (seventy-eight million reais) in 2016, is scheduled for 1st January 2018, except for employee health and safety events, which will be mandatory 6 (six) months after the implementation of eSocial.
It is important to mention that by 1st July 2017 employers will be able to access eSocial, for system improvement purposes.
Events
Events comprise information individualized by their nature, which must be inserted into eSocial. Events are divided into three types, namely: a) initial and checklist events; b) periodic events; and c) non-periodic events.
a) initial and checklist events: the first event to be inserted into the system, such as: employer information, list of HR entries, tax, list of positions and functions, working hours, workplaces, judicial and administrative proceedings, initial hiring information, and union affiliation, etc.
b) periodic events: have previously defined periodicity and are recurrent. They comprise events that pertain to payroll. The deadline to insert such events into system is the 7th day of the subsequent month.
c) non-periodic events: those events that do not have a defined periodicity, are not recurrent, in other words, must only be inserted when a specific fact occurs, such as: hiring; termination; amendments to employment agreements; employee health issues; leaves; reinstatement; etc.
What has changed?
The legislation has not been amended, just the way how all information will be sent by employers and received by authorities involved, namely: the Ministry of Labor and Employment, the Social Security Institute, the Federal Revenue Service and Caixa Econômica Federal, since the furnishing of the information is to become unified.
What information must be inserted into the system?
All information regarding services rendered by individuals, i.e., employees and compulsory non-employee workers, such as non-employee directors and interns, must be inserted into eSocial.
There are also optional non-employee workers for whom information does not necessarily have to be inserted into the system. The recommendation is not to insert information on such type of workers into the system, to avoid the same being used against the company.
Labor claims
Labor claims must be inserted into eSocial only when an employee is reinstated, under the “Reinstatement” event.
Issues requiring attention
All information inserted into eSocial can be changed, corrected or deleted. However, all changes and corrections will be recorded in the eSocial history. The company may, as a result thereof, be held liable for any information incorrectly inserted into the system, pursuant to applicable legislation.
Each event has a deadline to be observed and many of them are interconnected. Therefore, to insert a specific event, on certain occasions, another event must first be inserted, for example, the hiring of an employee precedes his/her leave or vacation.
It is essential that the initial and checklist events be ready before the implementation of eSocial, since it will only be possible to change information on an employee if his/her initial registration is in order on eSocial.
Managers must be trained on the importance to inform to the company’s HR department beforehand any changes to employment agreements, such as to the employee’s position and working hours, so that such changes can be inserted into eSocial correctly and in timely manner.
The validation of information by the system is minimal, therefore, there are no warnings if information inserted is incorrect or untrue.
In order to delete an event, the original registration number pertaining to the original insertion must be provided.
Immediate Actions
All companies must put together the initial and checklist events, mainly those regarding payroll, even before the implementation of eSocial.
It is advisable to request all current and future employees to verify the correctness of their personal information, such as, complete name, CPF, NIS and hiring date of birth, on the eSocial website:www.esocial.gov.br/qualificacaocadastral.aspx
It is essential to review internal procedures, put together reports on the company’s situation, particularly concerning payroll, position and roles, working hours and rectification of information before providing the same to eSocial.
Queries
Montgomery & Associados remain at our clients’ disposal to clarify any queries pertaining to eSocial. Queries may be forwarded to: esocial@montgomery.adv.br