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Lost your job and confused about the 40% FGTS fine? We will unravel all the details here.
The Severance Indemnity Fund (FGTS) ensures that, when a company dismisses you without just cause under an employment contract governed by the Consolidation of Labor Laws (CLT), you receive a fine of 40% of the accumulated amount.
Even so, many workers have questions about how this compensation works in practice. This fine serves as compensation for your time of service and, in this situation, you will receive 40% of the total deposited into your FGTS account.
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The purpose of the severance fine is to create a financial reserve for the worker, helping them transition between jobs and meet their basic needs during the period of unemployment.
But how do you accumulate an FGTS balance?
Whenever an employer signs your work booklet, Caixa Econômica Federal opens a new FGTS account for you. From then on, the employer is required to deposit 8% of your salary every month.
These deposits are mandatory and cannot be deducted from your salary. Over time, this amount accumulates, and termination without just cause is one of the withdrawal options. In addition, Caixa adjusts the balance for inflation using the Referential Rate (TR).
And how is the payment of the fine to the employee carried out?
During the contract termination process, the employer releases the FGTS termination fine together with the accumulated balance. Therefore, the payment occurs separately from the FGTS balance accumulated by the employee.
The employer must pay the termination fine together with the other labor obligation payments, such as overtime, unemployment insurance, and proportional vacation pay.
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After termination, the company must also issue and deliver the FGTS statement to the employee. This document confirms the amounts collected during the employment contract. Finally, the employer must deposit the 40% termination fine on the FGTS balance into the employee's account within 10 business days from the termination date.
