Employers are opposing a government proposal that will see them paying more in national insurance contributions to fund the country’s maternity leave costs, according to the Malta Employers’ Association.
The association had not expressed an opinion on the matter because it wanted to sound out members before taking a position, MEA director general Joe Farrugia told The Sunday Times of Malta.
Moreover, he described as a “misnomer” the impression that is being given by government exponents, particularly Prime Minister Joseph Muscat, that the proposal would see the government footing maternity leave costs for pregnant women.
“It is true the actual payment is going to be issued by the government but what is conveniently being left out is we as employers will be paying for it through higher national insurance payments,” he said.
He added: “How can we ever agree to something that will see employers increasing their labour costs without first speaking to our members? We never said we were in favour of such a measure.”
What is conveniently being left out is we as employers will be paying for it
The government has proposed to pay maternity costs usually borne by employers, ranging from €3 million to €4 million a year.
In return, employers will split this cost through an increase in the NI premium they pay. The percentage increase has not been established yet but the maternity cost will be spread over the full working population, which is around 150,000 people.
A rough calculation would see employers forking out an extra €26 per employee per year to cover the costs.
“Collectively, employers are not going to be better off,” Mr Farrugia said.
Initial soundings with employers show that while businesses with a high number of child-bearing women would benefit from such a measure, those with an all-male workforce will be paying for the maternity leave of women they do not employ.
The managing director of one such firm, which operates in the services industry, told The Sunday Times of Malta that the proposal did not make sense for his business.
He said the proposal meant he would have to fork out an extra €3,000 a year but get nothing in return.
However, a director of a company in the manufacturing industry with the majority of his workforce composed of young women said he was “ecstatic” about the proposal.
Maternity leave costs for his company were elevated, as well as causing logistical problems for the production line when employees took their leave. Not employing women was “tempting” he said.
Meanwhile, a government spokesman said employers had “agreed in principle” with the proposal during consultation meetings on the matter.
But, according to Mr Farrugia, although the employers’ association was “not criticising the measure”, a position had yet to be taken.