‘A veritable nightmare’ Employers face administrative hell with new leave regulations

It is imperative that a centralised system for keeping a record of parental leave utilisation is introduced since new regulations introduced by the government this week could very well prove to be ‘a veritable nightmare’ for employers, the Malta Chamber of Commerce, Enterprise and Industry is insisting.

Chamber president Marisa Xuereb told BusinessToday that employers will be hard-pressed to keep track of parental leave taken by each parent unless a centralised system is put in place, to be administered either by JobsPlus, DIER or the Maternity Leave Fund.

Under the new laws, fathers will be receiving 10 days paid leave, while new parents can benefit from up to two months paid leave. Regarding parental leave, parents will now be entitled to two months paid leave at the national parental leave rate. They will also benefit from another two months of unpaid leave which will be transferable from one parent to another.

Parental paid leave can be taken gradually across the first eight years of parenthood. In the first four years, the parents have to take 50% of the paid leave, or four weeks total.

Between the fourth and sixth years, parents can take two weeks paid leave. The remaining two weeks of paid leave can be taken between the sixth and eighth.

Xuereb said that having Jobsplus, DIER or the Maternity Leave Fund administer a centralised tracking system would ensure that there is no abuse of the benefit and ease the administrative burden of implementation on employers.

“Imagine an employer having to keep track of the leave taken by each employee, for each child they have, tracking each leave day over a period of eight years, possibly across multiple employers, since employees tend to change jobs multiple times over a period of eight years ... this could very well turn out to be a veritable nightmare,” she said.

The legislative package will come into effect on 2 August. Government will finance all the measures until 2023. As from 1 January 2024, the private sector will have to finance its share.

Like other EU member states, Malta had an obligation to implement this EU Directive by the end of this month.

“To be fair, the new leave package is not overly excessive,” Xuereb said. “In fact, the number of days added were the bare minimum stipulated under the EU Directive, and other considerations, like carer’s leave, remains unpaid.”

She insisted however that the directive was agreed to at EU level at a time when employers were not facing the inflationary pressures that are being felt today.

Government will be funding the additional benefits in the first year but will place the onus on employers thereafter, through substantial increases in the Maternity Leave Fund contributions.

This will have a negative impact on businesses, many of them are still trying to recuperate from the pandemic and struggling with several challenges such as labour and skills shortages and the resultant wage inflation, high costs of raw materials and transportation, and uncertainty surrounding the sustainability of the current energy prices.

Xuereb said that the current situation calls for greater sensitivity and a reassessment of the situation after the first year of implementation.

She also insisted that no portion of parental leave entitlement under the revised parameters should have been made transferable between the parents.

“In the interest of facilitating the administration of parental leave - and more importantly, of ensuring equal burden sharing between parents, irrespective of gender - no portion of parental leave entitlement should be transferable,” she said.

Xuereb said that although this recommendation had been made by all employer bodies - jointly - in writing, it was not taken up by Government.

“This is a missed opportunity to do something tangible to address both the gender employment gap and the gender pay gap and runs counter to promoting female participation in the labour market,” she said.