Ministries Positive On Proposal Regarding Sickness Benefit For Pregnant Employees
At the beginning of December of last year, the Chamber of Commerce made a proposal to the Ministry of Finance and Ministry of Social Affairs to amend the procedure of sickness benefit paid to pregnant employees so that a pregnant employee would not lose the sickness benefit paid to them by the Health Insurance Fund if the employer of the pregnant employee decides to compensate the sickness days to the extent of the average salary of the employee. Furthermore, we made a proposal that in the interests of equal treatment, the additional benefit paid by the employer in this situation should be made exempt from the social tax. By today, we have received a response regarding the proposal from the Ministry of Social Affairs as well as from the Ministry of Finance.
Current situation
Based on the Occupational Health and Safety Act, in case of temporary incapacity for work all employees are paid a benefit from the second to the fifth day in the amount of 70 percent of their average salary. At that, if the employer so wishes, they can indemnify the employee their average salary to its full extent and do it without having to pay social tax.
Based on the Health Insurance Act, a pregnant employee has the right to receive a benefit from the Health Insurance Fund in case of temporary incapacity for work. The benefit paid by the Health Insurance Fund is also 70 percent of the average salary of the employee. However, if an employer would like to pay to the pregnant employee an additional benefit for sickness, the pregnant employee would no longer have the right to receive the benefit paid by the Health Insurance Fund.
Feedback from the ministries
In the opinion of the Ministry of Social Affairs, the Chamber’s proposals are justified and they agree that during pregnancy women are in a more vulnerable situation due to their condition (from the point of view of participating in work life as well as health) as compared to other employees and may need more of benefit for temporary incapacity for work than other employees. Furthermore, the ministry explained that the current system of sickness benefits regarding pregnant employees according to which the Health Insurance Fund pays pregnant employees sickness benefit entered into force in 2009. The amendment was entered into force in a situation where Estonia was going through a recession and there were fears that employers may start to avoid employing pregnant employees. Furthermore, the ministry highlighted that most probably the legislators of the time could not foresee situations where an employer may voluntarily want to pay additional sickness benefit to a pregnant employee.
The Ministry of Social Affairs also informed that in May of this year they will present for approval a draft amendment of the Health Insurance Act and other acts within the framework of which the ministry is planning to realise the Chamber’s proposal regarding sickness benefits for pregnant employees.
The Ministry of Finance was also not against our proposal, but find that in this case the situation should be considered in broader perspective and the social tax benefit should be extended not only for pregnant employees, but anyone whose income paid by the Health Insurance Fund is below the income taxed with social tax earned last year. For example, according to the ministry, employees taking care of children under the age of 12 are in such situation. In its response, the Ministry of Finance emphasises that the amendments should be carefully considered in cooperation with the Ministry of Social Affairs.