December 29, 2017 / 11:54 AM / a year ago

UPDATE 1-Off-the-books employment up in Nov despite Brazil labor reform

(Updates with details, context)

By Bruno Federowski

SAO PAULO, Dec 29 (Reuters) - Off-the-books jobs continued to be the main driver of employment gains in Brazil in November even as a bill loosening labor laws came into effect.

The unemployed rate fell to the year’s low of 12 percent, in line with the median forecast in a Reuters poll of economists, state statistics agency IBGE said on Friday. It was the eight straight month of decline.

Off-the-books jobs accounted for most of the month’s gains, dashing expectations that the labor reform - which among other things loosens the requirements for seasonal and temporary hiring - would revert a year-long trend of rising informality.

Reuters reported last month that the labor overhaul was prompting small firms to bring workers onto their books, though economists acknowledged the effects of the bill may be slow in coming.

“The labor market is getting more and more informal,” IBGE economist Cimar Azeredo said.

Informal workers avoid a heavy tax burden on their salaries but are not entitled to many benefits. Wages remained flat when adjusted for inflation in the three months through November, suggesting the strengthening labor market is still far from stoking inflation.

Brazil’s unemployment rate fell gradually from an all-time high seen in March as Latin America’s largest economy recovered from the deepest recession in decades. (Reporting by Bruno Federowski)

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