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Social security increase to fund more support for working parents

Social security increase to fund more support for working parents

Wednesday 11 September 2019

Social security increase to fund more support for working parents


An increase to contributions from Jersey's top earners could fund more support for new parents taking time off work as part of the Social Security Minister's revised "family friendly" plans.

Those who earn between £53,000 and £250,000 could be in for a 0.5% increase to their contributions to fund Social Security Minister Deputy Judy Martin’s bid to encourage both parents – not just mothers – to take time off work after having a baby.

It comes as part of the latest iteration of the belated “family friendly” legislation designed to protect the rights of working parents which the Minister submitted yesterday as a proposition for the States to debate later this year.

The Minister withdrew her original proposals following a business backlash, with small firms fearing they would struggle to cope with the cost of drastic increases to parental leave – but the island’s main business lobby group, the Chamber of Commerce say they still haven’t been consulted since this happened in June.

 

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Pictured: The Chamber of Commerce deemed the last iteration of the law to be "not enough" to address business concerns.

The new “revised” version of the law was yesterday announced through a press release circulated by the Government of Jersey, but that didn't mention the proposed increases to social security contributions to raise funds for “creating equal parental benefits.”

The draft legislation, which is due to be debated by the States Chamber at the end of next month, explains that Deputy Martin’s predecessor Deputy Susie Pinel “made a commitment in 2018 to introduce equality in contributory parental benefits as part of the ongoing review of the Social Security Scheme.” 

As it stands, the department currently offers a “maternity allowance” - £216.86 a week, rising to £222.53 next month – for working women to help them take time off work to have a baby for a maximum of 18 weeks. 

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Pictured: A rise in social security contributions could fund the increase in parental allowances.

Now, it’s being proposed that for the first six weeks of compulsory paid leave after having a child, both parents should be allowed to claim this benefit and this additional cost will be funded by money raised from increases to contributions. 

The new legislation states: “To support this additional cost, it is proposed that the liability of employers and Class 2 contributors, paying contributions above the Standard Earnings Limit of £53,304 will be increased from January 2020, as follows –

  • the Upper Earnings Limit – the maximum level of earnings that is taken into account for contribution purposes – will increase from £176,232 to £250,000;
  • the percentage rate levied on earnings above the Standard Earnings Limit (£53,000–£250,000) will increase by 0.5% from 2% to 2.5%.

“The overall impact of these two changes is additional contributions into the Social Security Fund estimated at £3.35 million a year.”

This allowance will then be deductible from wages paid to employees during this six-week time frame. 

“This recognises the recommendation of the Scrutiny Panel that contributory benefits should support the ethos that parental leave includes all parties, not just the mother.”

The new version of the law also details how the Minister has addressed the views of the Chamber and other business stakeholders as part of a review by the Economic and International Affairs Scrutiny Panel.

Despite this, Chamber of Commerce’s Chief Executive Murray Norton told Express that it was a “disappointment” that since Deputy Martin withdrew the previous version in June, they haven’t been consulted. 

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Pictured: The island's main business lobby say that there has been no consultation regarding the revised law.

“We did at the time say that we would hope that [the withdrawal] would mean that the Minister would consult because we’d said that there hadn’t been enough consultation… Since the point of withdrawal until today, we’ve had no consultation with Social Security.” 

Speaking about the importance of the business community being consulted on significant changes to the employment law, Mr Norton said: “They will affect employers and employees and it’s quite important that we discuss them. 

“We’ve always said that we wanted to work with [Social Security]. We’re very much in favour of the family-friendly legislation in the broad brush term, but it needs to be practical.”

Nevertheless, the new proposition claims that it does sufficiently address the concerns raised and appears to throw down the gauntlet to the business community to compromise. The proposition states: “There will inevitably be differences of opinion on employment protection, and a balance must be struck.”

In terms of actual changes to the delayed law, the revisions include:  

  • reducing the number of “blocks” that parents can take their increased leave from four blocks over three years to three blocks over two years;
  • increasing the notice period that working parents have to give their employer if there are any changes to parental leave from 14 days to 28 days;
  • introducing a “reasonableness test” which reduces flexibility for new parents if anything changes regarding their plans to take leave taking account of “the size and the financial and administrative resources of the employer”;
  • ensuring working parents are only entitled to all three blocks of leave if they have notified their employer 15 weeks before the child is due;
  • clarifying that parents cannot transfer untaken parental leave if they move jobs;
  • creating an offence for anyone who provides false statements or information in connection with parental leave.

Elsewhere in the revised proposals, it recognises that not all businesses have the resources to provide dedicated breastfeeding facilities. As a solution, the Minister has encouraged organisations “to share amenities where possible” and she is also compiling a list of breastfeeding friendly venues (cafés, restaurants, shops and other spaces) to publicise places which “welcome breastfeeding mothers on their premises.” 

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Pictured: The new proposal acknowledges that not all businesses can provide dedicated breastfeeding facilities.

The draft law does not, however, adopt the suggestion that small businesses should be exempt from the family friendly legislation.

Of this, it says: “The children of parents who work for small businesses do not deserve a lower level of protection than the children of parents who work for larger companies.” 

Self-described as “a bold step forward,” the revised legislation concludes with a reminder of why such changes are necessary to the island’s workplaces. 

“The Minister accepts that this culture change will take time, particularly in some traditionally male-dominated sectors, but this positive step is vital to start that process of change.”

States Members will debate the revised version of the law on 22 October.

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