What is pejotização and what does the law say about it?

Do you know what pejotização is? It is a term widely used today to refer to workers who are in different professional regimes of the CLT.

And today we are going to understand more about this pejotization and what the law really indicates about this practice.

What is Pejotization?

Now let's understand what pejotização is, this is a term used to refer to the practice in which a company's worker is hired as a legal entity (PJ), instead of being hired as a formal worker.

Therefore, instead of the person being hired in accordance with the Consolidation of Labor Laws, following their employer's rights and duties, they will be hired through a micro-entrepreneur CNPJ.

When hiring a professional under the PJ model, a legal entity, the employer will not need to pay various social and tax charges related to their employees.

This practice is often used with the aim of reducing labor and social security charges, as well as to avoid fulfilling labor obligations, such as payment of overtime, vacations, thirteenth salary, among other labor and social security rights.

When used in this way, it ends up being called pejotização, a more pejorative term to refer to this practice that seeks to disguise work relationships, with the aim of not complying with legal and labor obligations.

Pejotização ends up being configured as tax fraud, in which the professional has the same obligations as a formal worker, but without the labor benefits that a company is obliged to pay.

One of the characteristics of pejotização is that it is a self-employed worker who provides services on a continuous and regular basis, as if he were a professional on the company's staff.

Furthermore, in pejotization, the professional ends up having a fixed schedule and is subordinate to a hierarchy, which when hired as a PJ should not exist.

Professionals who work as legal entities are not subordinate to others and do not have fixed hours. Another characteristic is that the professional will also not receive benefits such as food vouchers, health insurance and others.

Pejotization in this form is completely illegal, it is as if it were a way for companies to avoid paying taxes and fees for the maintenance of an employee.

Difference between pejotization and outsourcing

In addition to understanding what pejotização is, it is necessary to know that this term is different from outsourcing, they are similar practices, but their processes are different.

Pejotização is a practice of hiring a professional as a PJ instead of hiring him as a formal worker.

In this case, the worker will open his own CNPJ, generally as MEI, and issues invoices or provides services through an individual company.

This practice of pejotization is very common in areas of technology, engineering, communication and others.

Outsourcing is a practice in which one company hires another, and for this to be done legally there must be a written service provision contract with values and deadlines, and signed.

So the main difference between outsourcing and pejotização is the fact that, when a professional creates a PJ to work in a company, in the same way as a formal professional would, the company is committing labor fraud.

Something that can generate certain losses for professionals, as they will lose their rights such as vacations, 13th salary and FGTS for retirement in the future.

Another big difference between pejotization and outsourcing is that outsourcing usually happens on a one-off basis; when a deadline ends, a new contract will need to be drawn up.

Pejotização may be considered illegal if the elements of the employment relationship (subordination, personal nature, habitual nature and onerous nature) are present, which would lead to the reclassification of the worker as an employee.

What does the law say about PJ workers?

Being something done outside the CLT, until recently the PJ did not have many regulations, but in 2022 law no. 14,229 was updated with more rules for self-employed workers.

This law provides that for a self-employed worker to be hired, he will need a written service provision contract, with all services, value and execution deadlines.

Therefore, according to the law, outsourcing is permitted, however, pejotization is illegal and if professionals who are undergoing this hiring method seek legal assistance, they will probably win a lawsuit.

Consequences of pejotization

Pejotização brings certain consequences for those involved, but mainly for companies that accept and encourage this type of labor practice.

For companies

If the situation ends up in court or if the professional himself takes the matter to court, the company will end up suffering the consequences.

The main one being a fine and even a prison sentence, which is included in the Penal Code, article 203.

The company may be fined by the MTE, Ministry of Labor and Employment, as well as have a lawsuit filed by the MTE against the company in question that is hiring a professional under a PJ regime in an irregular manner.

Furthermore, if the worker files a lawsuit against the company, it is possible that the company will have to pay compensation.

If the courts consider that there was an employment relationship, the company may be required to retroactively pay benefits and labor rights, such as vacations, 13th salary, overtime, among others.

For workers

For workers, the main consequence comes in the long term and mainly in the financial field, as they end up not having access to labor benefits such as vacation, FGTS, 13th salary and others.

Furthermore, in this condition, they may not have access to social security, which means that they do not contribute to retirement and are not entitled to sickness benefits, for example.

And although employers do not pay taxes, professionals will need to pay their legal entity charges, such as income tax, Simples Nacional and others.

Pejotização can contribute to the evasion of social security contributions, harming the financing of social security, including retirement, health and social assistance.