Employers will probably be paying their contribution to the maternity leave fund via the Inland Revenue Department, which will then pass it on to the trust which will administer it, the Malta Employers’ Association believes.

The amount paid will be declared on the FS5 on which they declare their monthly employee payments.

Legal Notice 258/2015 issued last Tuesday gives the contributions that must be made to build up a fund from which the 14 weeks of maternity leave will be refunded to employers.

For the majority of workers, employers will pay 0.3 per cent of the basic weekly wage of all their employees, but there are also flat rates for specific categories.

The MEA explained in a circular to its members that a new line would be added in the FS5 form, indicating the amount paid by the employer towards this fund.

“The main payroll software makers are working to adjust the payroll systems in time ... In case of companies that do not manage to make the deduction in the next payroll (some of them are due next week), they will be able to make the deductions with the backdating to July 6 in the following pay period,” it said.

The fund spreads the load for maternity leave across all employers, as will make a small regular payment, rather than having to pay maternity leave for 14 weeks – very often coinciding with additional payments for a temporary staff member or in overtime to cover for her absence.

The fund will have to handle around €8.5 million in maternity leave payments every year

The MEA pointed out, however, that the burden remains on employers’ shoulders.

“It is to be made clear that employers are still incurring the cost of the 14 weeks, unlike many other countries where maternity leave is paid by the State,” director general Joe Farrugia said.

The GRTU is concerned about another aspect: that employers will need to pay the maternity leave and then apply for reimbursement from the fund.

“We still believe that the fund should just pay the maternity leave to the employee in the first place, since government already has a system in place to pay weeks 14 to 18.

“It remains to be seen how long the reimbursement will take! We have had very bad experiences with refunds in the past,” chief executive officer Abigail Mamo said.

The board of trustees overseeing the fund will include three representatives from employers’ associations and one from a union, according to Legal Notice 357.

They will need to submit a report on the trust every year to the MCESD and will also recommend adjustments to the rate of contribution payable.

Rough calculations indicate that the fund will have to handle around €8.5 million in maternity leave payments every year.

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