On 10 April 2024, the Minister of Social Affairs and Employment sent a letter to the House of Representatives. This letter sets out various scenarios on how the current statutory leave system could be simplified and the associated financial consequences of these scenarios. In this news item, we elaborate on the proposed adjustments to achieve the desired simplification of the statutory leave system.
Introduction
The reason for the parliamentary letter of 10 April 2024 is the desire to simplify the existing statutory leave system, as stipulated in the Dutch Work and Care Act (Wet arbeid en zorg, Wazo). According to the minister, due to repeated extensions and amendments, the Wazo now contains an extensive but at the same time confusing set of leave provisions. This entails the risk of employees not making optimal choices when taking leave, or not taking any leave at all. This may jeopardise the objectives of the Wazo, such as facilitating a good work-life balance and encouraging labour participation and thus economic independence of women in particular.
Currently, Dutch law includes ten different statutory leave schemes that can contribute to a good balance between work and caregiving responsibilities for children and other family member / loved ones. The government considers it important that everyone is aware of the existing statutory leave schemes and their respective conditions. Simplifying the current system will contribute to this.
The various scenarios described in the parliamentary letter are based on the advice of the Social and Economic Council (Sociaal Economische Raad, SER). Before discussing the different scenarios for achieving the desired simplification in more detail, we first provide a brief overview of the SER advice. We conclude with the anticipated timelines for the potential streamlining of the statutory leave system.
SER advice Balance on social leave
The SER issued an advice on social leave (Balans in maatschappelijk verlof) in December 2023.
The SER observes that the existing leave arrangements are complex for employers, employees and the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) alike and urges the government to implement a modernization of the leave system. In addition, the SER points out that not all eligible individuals take leave. Factors contributing to this include: financial considerations, workplace culture that does not readily accommodate leave, or the employee's expectation that work or their career progression would not allow to take leave. Unfamiliarity with regulations, personal choices and circumstances also play a role. Furthermore, according to the SER, the current distribution of burden between government, employers and employees is insufficiently balanced. Currently, employers and employees cover the costs of paid (additional) birth and parental leave to a considerable extent, while the government's contribution is limited.
In light of these observations, the SER proposes three important principles for renewing the statutory leave system: (i) enhanced clarity and accessibility, (ii) better balance between financial responsibility and control, and (iii) promoting good consultation between employers and employees on taking leave. Based on these principles, the SER recommends a new 'social leave system' consisting of three pillars: care for children, informal caregiving and personal leave.
Scenarios for simplifying the leave system
The recent parliamentary letter outlines the potential strategies for simplifying the leave system in the form of scenarios. These scenarios aim for uniformity in conditions and administrative obligations within the various leave categories, thereby facilitating leave-taking for both employers and employees. Each scenario is accompanied by its primary policy and financial implications. The scenarios were developed in accordance with the SER advice, including the three main pillars discussed earlier.
Cluster 1: Childcare
This cluster includes the current maternity leave, (additional) birth leave, adoption and foster care leave and (paid) parental leave.
The five different elaborated scenarios within this cluster mainly include variants integrating and expanding the currently available schemes, but also include a scenario that reduces the existing leave arrangements. The financial implications of the scenarios vary widely. Most scenarios propose a payment level of 70% of wages, consistent with the current levels. Recognizing that financial reasons may deter leave-taking, one scenario stipulates a payment of at least the statutory minimum wage. Finally, one of the scenarios envisages increasing the payment level to 100% of the salary. While this improves accessibility for beneficiaries, it entails significant financial implications for the government and employers.
Cluster 2: Informal caregiving
This cluster includes the current short-term and long-term care leave. The leave arrangements in this cluster facilitate the combination of work and informal care.
Two scenarios were developed within the informal caregiving cluster, featuring variations for integrating and expanding short- and long-term care leave. In the first scenario, both existing care leave schemes are consolidated into a single care leave scheme of eight weeks per year, with the first two weeks paid at 70% of the salary. This maintains the current leave duration and payment level. Another scenario aims to enhance accessibility to informal care leave by introducing a full leave duration of eight weeks per year with a payment level of 70% of the salary.
Cluster 3: Personal situations
The third cluster pertains to leave arrangements for 'personal situations'. In the current leave system, only emergency and other short-term leave fall under this cluster. No scenarios have been developed within this cluster. According to the minister, this is a non-exhaustive scheme catering to a variety of circumstances that always require customization. These situations include leave for urgent, unexpected, or special personal situations, such as picking up a sick child from school or dealing with the death of an immediate family member. Potential future forms of leave, such as transition leave and bereavement leave, could also be incorporated.
Timelines
Given the potential (financial) impact of the decision on how the leave system will be modified, the current government believes it is the responsibility of the next government to continue the process of simplifying the current leave system. This implies that while the initial steps towards a revised leave system have been initiated, it may still take a considerable amount of time before a new leave system is implemented. After the legislative proposal is submitted to the House of Representatives, it will still need to be debated by the House of Representatives and approved by the Senate before it becomes law.
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