Brazil Moves to End 6x1 Work Rotation as Government Readies MEI Ceiling Hike

Overview

• A constitutional amendment to abolish the 6x1 work rotation has cleared the Chamber of Deputies and is being negotiated in the Senate with government-led talks to secure a vote.
• The executive branch plans to send a bill that would raise the MEI (microentrepreneur) annual revenue cap from R$81,000 to roughly R$130–140,000 in a phased move over 2027–28 and allow broader hiring by MEIs.
• Congressional rapporteur Jorge Goetten is pressing for wider Simples National changes, proposing to lift the top band from R$4.8 million to R$8 million and to shorten the window to exclude delinquent MEIs from 12 months to 2 months, citing about R$3 billion in MEI arrears.
• Senior ministers are divided on compensating firms for the 6x1 change, with Planning Minister Bruno Moretti open to sector talks and Finance Minister Dario Durigan reportedly opposing any corporate compensation.
• Policy-makers face trade-offs between easing rules for small firms and fiscal and inflation risks because recent subsidized credit and debt-refinancing programs increase demand that the Central Bank has flagged as inflationary.