Brazil's lower house Wednesday started discussing a bill opposed by labor unions that would allow companies to outsource their entire labor force.
Currently, companies can only hire outsourced workers for non-core activities like security and cleaning services.
The law, if approved, will permit outsourced workers to work in both core and non-core activities.
Congressman Siba Machado of the ruling Workers' Party told reporters the law would allow companies to fire employees and replace them with outsourced workers at lower wages.
He said his party would try to block approval of the law that he said could bring an end to worker rights and benefits. Congress was expected to vote later Wednesday or possibly on Thursday.
Brazil's largest labor umbrella organization, the Central Workers Union, held protest rallies in 12 cities on Tuesday.
"The law will open the door to the end of important worker's rights like paid vacations, the 13th salary (mandatory year-end bonus), over time and days off," said labor leader Paulo Barela.
Paulo Skaf, president of the Sao Paulo Federation of Industries said workers, outsourced or not, will not lose any of those rights.
"The bill will allow companies to resort to outsourced workers who are specialized in their fields and guarantee quality," he added. "It will create more jobs and increase the competitiveness of Brazilian companies."