The Superior Labor Court (TST) established 12 new topics in a virtual proceeding last month, based on recent changes to the TST’s Internal Regulations by Regulatory Amendment 7/2024. One of these provisions, ruled on in Appeal No. 0000473-37.2024.5.05.0371 and referred to as Issue 121, establishes a relevant ruling for labor relations involving the provision of food allowances by companies.
In essence, the TST ruled that food allowances are not considered part of an employee’s salary when the employee contributes to the cost, regardless of the amount of the contribution.
This decision reinforces a position already established in labor case law, but now takes on an even clearer form. The Court understood that even when the payroll deduction is symbolic, the mere existence of co-participation decharacterizes the salary nature of the benefit. In other words, it does not matter if the amount paid by the employee is minimal — what matters is their effective contribution to the cost of the benefit.
This definition is especially important for companies that adopt structured meal programs, whether through agreements with the Worker Meal Program (PAT) or through internal policies. Based on this understanding, companies that correctly practice co-participation can maintain food allowances as compensation, i.e., without including them in the calculation of labor costs, such as Length-of-Service Guarantee Fund (FGTS), Social Security (INSS), 13th month salary, vacation pay, and other remuneration-related items.
From a practical point of view, this is an opportunity to strengthen labor compliance and review internal policies, especially in a scenario where labor liabilities can compromise the financial health of projects and contracts. This is because, by ensuring that the benefit is treated as compensation, the company reduces its exposure to tax assessments and possible labor lawsuits seeking to incorporate the amount into the employee’s monthly remuneration. In addition, it helps reduce the company’s internal costs, given its compensatory nature.
However, it is important to note that simply providing the benefit can reverse this advantage. Article 458 of the Consolidated Labor Laws (CLT) establishes that goods and utilities habitually granted by the employer are, as a rule, considered an integral part of the salary, except when there is a legal provision or collective rule that determines otherwise — and it is in this context that co-participation is inserted as an element that decharacterizes the nature of the salary.
In addition, the provision of food allowances must be supported by formal instruments, such as internal policies or clauses provided for in collective agreements and conventions. It is also essential that the amounts deducted from employees are duly recorded on their pay slips, with clear documentary evidence.
Given this scenario, the services of specialized legal counsel are essential to diagnose the company’s benefits policy, structure legally valid co-participation models, and review internal documents with a view to mitigating risks.
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Written by Daniel Rangel and Júlia Soares