The acting President of the Republic, (PSB), fully vetoed the bill that established the 1st employment contract. The measure was published in the Official Gazette of the Union this Thursday (June 18, 2026).
The text approved by the National Congress established a reduction in labor and social security charges for companies that hired people aged 18 to 29 looking for their first opportunity in the formal market. Here is the document (PDF — 129 kB).
The proposal created a type of contracting with flexibility in labor rights. The project included reduced charges for employers and differentiated tax conditions.
The Executive sent a message to Congress justifying the veto. According to the government, the project violated constitutional principles such as isonomy, material equality and prohibition against social regression by establishing a reduced set of rights for some workers.
Technical analyzes by the federal government concluded that the proposal was unconstitutional. The evaluation indicated that the text reduced labor and social security guarantees for young people. The project created a lower protection regime than that applied to other employees governed by the CLT (Consolidation of Labor Laws).
Points questioned
The government questioned 2 aspects of the project. The possibility of working hours of up to 44 hours per week was criticized by the Executive. According to the justification for the veto, the measure would make it difficult to reconcile work and studies and could harm the educational training of young people.
The tax and social security benefits granted to employers were also criticized. The government argued that there would be no proportional compensation for workers. Furthermore, he assessed that the proposal could discourage hiring under the Apprenticeship Law.
According to the Ministry of Labor and Employment, more than 6 million young people entered the formal market through the Apprenticeship Law in the last 26 years. In March 2026, the country registered more than 700 thousand active contracts in this modality, the highest number in the historical series.
The vetoed project would be applicable throughout the national territory and would create a new method of hiring young people for their first job. Congress will still be able to analyze the veto and decide whether to maintain or overturn it.
