Can FGTS be deducted from salary? Understand

The Severance Indemnity Fund (FGTS) is one of the most important labor rights in Brazil. It functions as a kind of compulsory savings account for the worker, which is deposited by the employer in an account linked to the employment contract. This reserve of funds is essential to ensure the worker's financial stability in the event of dismissal without just cause, as well as being used in other specific situations, such as the purchase of a home, serious illnesses, among others.

However, it is common for doubts to arise regarding the deduction of FGTS from the monthly salary. After all, can the employer make this deduction or not? 

What does the law say?

The Consolidation of Labor Laws (CLT) and the FGTS Law (Law No. 8.036/90) are the main legal documents governing labor relations and the Severance Indemnity Fund in Brazil.

Article 15 of the CLT states that it is forbidden to deduct any amount from an employee's salary, except when this is the result of advances, legal provisions or collective agreements. The FGTS does not fall within any of these exceptions, so it cannot be deducted from the worker's salary.

Article 15 of the FGTS Law states that the deposit of FGTS in a linked account is mandatory for all employers, regardless of their line of business, and will be due under the following conditions, among others: upon termination of the employment contract, in the event of suspension of the employment contract due to retirement granted to the temporary worker, in the event of termination of the contract due to mutual fault or force majeure, among other specific cases.

Judicial precedents and interpretations

In addition to the legal basis established by the CLT and the FGTS Law, there is also a vast body of case law made up of court decisions that reinforce the ban on deducting FGTS from workers' salaries.

Brazilian courts have unanimously ruled that the FGTS is a worker's right and that its value must be deposited in full by the employer, without any kind of deduction. Any practice to the contrary is considered illegal and subject to sanctions.

What are the penalties for employers who deduct FGTS from wages?

If the employer deducts the FGTS from the worker's salary, he will be subject to various penalties under labor law. Among the most common consequences are

• Fines: Employers can be fined for non-compliance with labor legislation. The amount of the fine can vary according to the number of employees and the repeat offense.
• Double payment: In addition to the fine, the employer will be obliged to double the amount of FGTS unduly deducted, i.e. they will have to deposit the amount that was illegally deducted back into the worker's account, plus the same amount again as compensation for the damage caused.
• Legal action: Workers can go to the Labor Court to demand compliance with their rights and compensation for the damage caused by the employer.

How to proceed in the event of undue deduction from the FGTS?

If the worker identifies that the FGTS is being unduly deducted from his salary, it is important to take some measures to ensure that the situation is regularized. These are

• Talk to the employer: In many cases, the FGTS deduction may be the result of an administrative error or misinterpretation of the legislation by the employer. That's why the first step is to talk to your employer directly and ask them to regularize the situation.
• File a complaint: If the employer refuses to correct the error, the worker can file a complaint with the union of the category or the nearest Regional Superintendence of Labor and Employment (SRTE).
• Seek legal advice: If all attempts to resolve the problem directly with the employer are unsuccessful, workers can seek legal advice and, if necessary, take legal action to demand that their rights are respected.

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The deduction of FGTS from a worker's salary is prohibited by Brazilian labor law. The amount corresponding to the FGTS must be deposited in full by the employer in the worker's linked account by the 7th of each month. 

If the employer deducts the FGTS from the worker's salary, they will be subject to penalties such as a fine, double payment and legal action. It is therefore important that workers are aware of their rights and know how to proceed in the event of irregularities.

See also: MEI and income tax: What you need to know about micro-entrepreneurship

May 6th, 2024