April 8 (Bloomberg) -- For millions of maids, the law is a milestone being compared to Brazil’s 19th-century abolition of slavery. For the families that rely on domestics, it’s a budget squeeze that could force them to cook and clean for themselves.
Congress last week approved a constitutional amendment granting domestic servants an 8-hour work day, overtime pay and other rights enjoyed by the rest of the workforce. While hailed by lawmakers as historic, the law is spreading concern among middle and upper-class families that the cost of employing a maid or nanny will spike after almost doubling since 2006.
Daniela Batista, a working mom in Sao Paulo, says she may fire the nanny who has cared for her children for two years to avoid paying the additional 800 reais ($400) a month she says it will now cost her in overtime pay alone. Currently she pays 1,800 reais for 12 hours of service, five days a week, and she may have to hunt for someone who’ll work for less.
“For me, working fewer hours isn’t an option, nor for anyone else I know,” says Batista, who is chief financial officer of Simpress, a printing services provider.
Batista isn’t the only one worried about being priced out of the market. Legal Domestics, a group that promotes rights for maids, estimates that 815,000 mostly poor, black women could lose their jobs as a result of the stricter rules. That’s 40 percent of the current 2 million documented domestic workers.
“A family isn’t a business -- they’re not going to hire an accountant to calculate overtime, vacation pay, and so on,” Mario Avelino, head of the Rio de Janeiro-based group, which based its findings on an online survey of employers, said in a phone interview.
While firings can be contained if the government grants tax benefits for families, there’s no doubt the law will accelerate a trend of rising costs for help, Avelino said.
Average salaries for domestic employees jumped 13 percent last year, twice the pace of inflation, and have risen faster than any other profession in the past decade, according to the national statistics agency.
One reason is that the number of maids is shrinking, to 6.7 million in 2011 from 7.2 million in 2009, as close to record-low unemployment encourages the poor, who for decades formed a pool of cheap labor, to pursue better-paying, higher-skilled jobs.
“We’re moving toward an American-styled system where soon only the rich will be able to afford a maid,” Avelino said.
That’s a break from tradition in Brazil, whose population of domestic workers is almost double the total of 3.6 million in all developed nations, according to the Geneva-based International Labor Organization. A sign of the entrenched habits: even two-bedroom apartments are equipped with closet-sized maid’s quarters, and babies frequently sleep in the same room as their nannies.
The law has raised awareness of longstanding mistreatment of maids, bringing to the surface class tensions that were partially smoothed over by an economic boom during Luiz Inacio Lula da Silva’s presidency, when both rich and poor prospered.
More than 40 million people climbed out of poverty during the former metal worker’s 2003-2011 administration as an increase in anti-poverty spending and price stability led to 4.1 percent average annual growth. By contrast, inflation this year is quickening --it stood at 6.43 percent in mid-March -- even as the economy struggles to regain its footing after growing 0.9 percent in 2012, less than Japan and the U.S.
A recent issue of Veja, a newsmagazine read by Brazil’s middle and upper classes, carried on its cover a photo of a sad-faced man in a shirt and tie washing dishes under the headline “You Tomorrow.” In contrast, the country’s most popular weekend television news show, “Fantastico,” highlighted maids’ newfound empowerment.
In one tongue-and-cheek skit illustrating the newly acquired rights, including up to a two-hour break for lunch, a maid is asked by her employer to take away the dishes after having served a sumptuous midday meal.
“I don’t think there’s time,” says the fictitious Maria, bursting into laughter as she whips out from behind her apron a giant alarm clock. “Now it’s my lunch hour!”
Even if dismissals are avoided, the law will spur legal actions against employers and push more household staff into the informal sector because Brazil’s rigid labor code, which dates from the 1940s, favors workers, said Paulo Perrotti, a lawyer.
“Within the retrograde system that exists, the right thing was done,” said Perrotti, whose Sao Paulo practice Perrotti & Barrueco Associates has defended families in disputes with domestic employees. “The question is whether the law will reach the intended beneficiaries or drive more people off the books.”
Batista, 36, says she has discussed with other moms the possibility of rewriting their employees’ contracts and underreporting hours to absorb the extra costs. Even though it pains her to break her kids’ emotional bond with their baba, as nannies are affectionately known, she says she’s likely to replace her with someone at a lower base salary. Brazil’s national minimum wage is 678 reais.
“I don’t feel comfortable making a deal with her because I’d be violating the law,” said Batista, adding that she might forgo replacing the baba by asking a maid whom she and her husband also employ to pitch in with child-rearing.
Pricier child care could also tempt some of the 9 million women who’ve joined the workforce since 2001 to return home, said Fernando de Holanda Barbosa Jr., an economist at Rio’s Getulio Vargas Foundation, a university.
“If at the end of the month they’re not earning much, some may prefer to spend more time with their children,” said Barbosa, who specializes in labor market trends.
The risk is real, he says, because of a lack of child care options in Brazil. When parents are lucky enough to enroll their kids in a day care center -- waiting lists of up to a year are not uncommon -- they rarely provide the flexible hours working moms and dads require.
President Dilma Rousseff has vowed to address the shortage, repeating this month a campaign pledge to add 6,000 nursery schools -- nine a day -- before her current term ends in 2014. In the first half of her four-year term, 612 were completed.
The government is also working on new legislation to avoid mass firings and ensure maids are documented by granting tax breaks to families and making it easier for them to meet the tougher obligations.
“We have to act quickly because the legal uncertainty is huge,” Senator Romero Juca, leader of the government’s effort, told reporters April 3.
What’s not in doubt is the legislation’s historic nature, almost 125 years after Brazil became the last country in the Western hemisphere to end slavery. The ILO said it will help narrow “the historical divide between the richest and whiter stratum of society and the poorest and darker lower end.”
Even with recent strides reducing poverty, Brazil ranks 14th worst in income equality, below Nigeria and Russia, among 154 countries in a 2012 study by the World Bank.
“We’re shutting down the last of the slave quarters and throwing away the key,” Senate President Renan Calheiros said in an April 2 legislative session attended by several maids. The constitutional amendment was approved by a unanimous vote.
While maids are concerned about the law possibly backfiring, they say the benefits are overdue. Under the amendment, households for the first time will be required, as companies already are, to contribute 8 percent of employees’ gross pay to a state-managed severance fund.
“Domestic servants work, work, work all our lives and have nothing at the end,” Lorainy Cintra Pereira, a 24-year-old nanny, said as she kept an eye on two toddlers at a park in Rio’s beachside Ipanema neighborhood. “Now, with this new law, you can build up a little savings.”
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