Estonia Enacts New Reforms to Its Parental Leave and Benefit System to Better Reconcile Work and Family Life

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
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[co-author: Anu Kirss]*

The latest phase of legislative changes to Estonia’s Family Benefits Act are due to come into effect in July 2020.

Legislative changes to the Family Benefits Act were approved in 2017, but the changes have been introduced gradually. The primary goal of the changes is to promote a more even distribution of the burden of care between parents and introduce more flexibility into the system to help parents, especially mothers, with the improved work-life balance.

The three most important changes from the reform are the following:

  • Effective March 1, 2018, the employment-related income threshold during parental leave was increased to one and a half times the national average gross earnings. This is the amount that can be earned from work during parental leave without the parental benefit being reduced.
  • Beginning on July 1, 2020, the payment period for parental benefit will have increased flexibility allowing employees to stop and start the parental benefit payment to suit their requirements. “The payment of the parental benefit can be suspended by calendar month and resumed in accordance with the wish of the parent until the child reaches three years of age.”
  • Also beginning on July 1, 2020, the leave system will begin to grant and pay a new type of parental benefit—the additional parental benefit for fathers (i.e., a so-called “daddy-month”). It is a non-transferable benefit for fathers, i.e., if the father does not use this portion of the benefit, it will not be transferred to the mother. This parental benefit can be used in whole or in part starting 30 days before the estimated due date until the child reaches three years of age.

If the father is employed, this benefit will be accompanied by paternity leave of 30 days instead of the current 10-day leave. The use of paternity leave will be entered into the employment register. If the father is not employed (e.g., he is unemployed, self-employed, or working under civil contract) he is not eligible for paternity leave, but “he is still eligible to receive the additional parental benefit for fathers for a period of 30 calendar days.”

The new system of “daddy-month” will only apply to those children who are born on or after July 1, 2020, or later, regardless of the child’s estimated due date. However, for the new system to apply, the entire paternity leave taken based on the new system must begin after July 1, 2020.

If a father wants to stay at home with his child for more than 30 days and receive (the standard) parental benefit, then this possibility will continue to exist in the future. If the child is at least 70 days old, it is up to the mother and father to decide which of them will stay with the child and receive the parental benefit.

Comment

The reforms are intended to balance the needs of employees and employers, and should also have a positive effect on gender equality. Whether the introduction of a “daddy-month” will motivate more fathers to take parental leave is to be seen.

 

*TGS Baltic

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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