Insights

International Benefits Update – Q2 2022

July 25, 2022

/Employee Benefits

In the second quarter of 2022, many countries, including Japan and the Netherlands, focused on expanding childcare and family leave provisions. New Zealand introduced a new holiday, and some countries updated their mandatory contribution rates.

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Americas

Argentina Rolls Out Onsite Daycare Mandate

Argentina has rolled out a new mandate for onsite daycare facilities. Employers with more than 100 employees are required to provide daycare services for employees’ children between ages of 45 days and three years. Employers can set up joint daycare facilities with other companies in the same industrial complex or within 2-km radius. Under collective bargaining agreements, employers have the option to offer non-taxable reimbursement covering all or part of daycare costs in lieu of setting up a daycare facility. The changes went into effect on March 23, 2022.

Costa Rica Introduces Paid Paternity Leave, Adoption Leave for Fathers

Costa Rica has introduced paid paternity leave of eight days, to be taken in increments of two days during first four weeks after childbirth. Employer and social security each will pay replacement benefits at 50% of salary. Three months of postnatal maternity leave can be taken by the father or person taking responsibility of the newborn in the event of the mother’s death during childbirth. Paid adoptive leave of three months can be taken by adoptive fathers (currently only available to mothers) starting on the day after placement of the child. The benefit will be paid out on the same basis as maternity leave. Adoption leave is a joint benefit and can be taken by both parents consecutively or at the same time.

APAC

Australia: Superannuation Rate Increase Progresses

The Superannuation Guarantee rate in Australia increased to 10.5% of total employee salary from the previous 10%. The rate will continue to increase by 0.5% every year till it reaches 12% in July 2025.

Japan Issues Several Changes to Childcare Leave Provisions

In Japan, the government has issued several changes to childcare leave entitlements. The changes took effect in April 2022 and will continue to be rolled out in the coming months. Changes from April 1, 2022, include childcare leave entitlement for fixed-term contract employees, who can now use childcare leave and with no waiting period. Additionally, employers are required to inform employees of childcare benefits and encourage the use of the leave provisions. From October 1, 2022, fathers can take paternity leave for up to four weeks. This leave can be taken consecutively or in two leave periods. In addition, employees will have the option to take the existing childcare leave in two leave periods (currently leave can only be taken in a single leave period). Effective April 1, 2023, employers with more than 1,000 employees will have to annually report the number of childcare leaves taken by employees.

New Zealand Introduces New Public Holiday for Matariki

The New Zealand government has introduced a new public holiday to commemorate the rising of Matariki, a large cluster of stars. The holiday intends to celebrate the present, honor those who lost their lives since the last Matariki rising and look forward to the future. The holiday, which will typically fall between June and July, was celebrated on June 24 this year.

EMEA

Denmark Expands Parental Leave

Effective August 2022, employees in Denmark will get 24 weeks of paternal leave. Each parent can take 11 weeks, out of which two weeks must be taken for childbirth or adoption reasons and nine weeks within the first year. The benefit also applies to single parents. Additionally, there are provisions for leave transfer under certain circumstances. The legislation passed on March 3, 2022.

Egypt: Social Security Contributions for Foreign Employees

Foreign employees are now required to contribute to Egypt’s social security system. Employer contribution towards social security is 18.75%, with employees contributing 11.5% of total salary, capped at EGY 9,400 (as of January 1, 2022). Employees belonging to countries under a “totalization agreement” with Egypt are exempt from contributing to Egypt’s social security under the condition that they contribute to their home country’s social security.

Greece Introduces New Supplementary Pension Fund

In 2022, the Auxiliary Capital Insurance Fund (TEKA) was introduced, which will gradually replace the existing supplementary pension fund. The reform gives employees more control of the investment of their pension fund, with the stated aim of increasing the value of the supplementary pension.

Hungary Reduces Employer Social Contribution Rate

Hungary reduced employer contribution for social security from 15.5% to 13%, effective January 1, 2022. Employee contribution is currently 18.5% of total pensionable salary.

Italy Increases Pensionable Salaries

The minimum and maximum pensionable salaries for calculating contributions to the state pension fund have increased in 2022. The minimum pensionable salary for contribution purposes to the Employees’ Pension Fund (FPLD) is now equal to EUR 49.91 per day for ordinary workers and EUR 138.05 per day for senior executives. The maximum pensionable salary for contribution purposes is equal to EUR 105,014 per year.

Kenya Requires Employer Contributions for Medical Coverage

From January 22, 2022, employers in Kenya are required to contribute to the National Health Insurance Fund (NHIF), changing from previous employee-only contributions. As per the new regulations, employers must pay matching contributions to NHIF unless they provide equal or better private medical coverage. NHIF contributions are mandatory for employees aged 18 or older.

Netherlands Increases Medical Contributions

Employer contributions to medical insurance, as prescribed under the Health Care Insurance Act (ZVW), are equal to 6.75% of the employee’s salary in 2022, reduced from 7% in 2021. The maximum salary for employer contribution purposes is increased to EUR 59,706 per year in 2022.

Netherlands Increases Parental Leave Payment

Effective August 2022, employees in Netherlands can take up to nine weeks of paternal leave at 70% of daily rate, capped at EUR 160. The parental leave payment increase is up from the previous 50%.

Norway Expands Occupational Pension Coverage

Norway issued changes to the mandatory occupational pension scheme (OTP) in January 2022. Employers had until June 30, 2022, to comply with the changes, which include a requirement for employers to enroll all employees earning more than NOK 1,000 in the company’s existing pension schemes. All employees are required to be enrolled regardless of their employment status (seasonal, part-time, or full time). A minimum employer contribution of 2% of the total employee salary is required. Employees can contribute on a voluntary basis, but employee contribution is not allowed to replace the employer contribution. Additionally, the minimum enrollment age is changed to 13 years to encourage pension savings for young employees.

Saudi Arabia Enacts Changes to Compulsory Health Insurance

Effective July 1, 2022, Saudi Arabia enacted several changes to its Compulsory Health Insurance. The government added new benefits for preventive screening, improved access to telemedicine and home care, family planning, women’s health, and benefits for kidney transplant, hip replacement, and knee replacement. The government also modified certain benefits including increasing benefit limits for maternity care, mental health care, dental, vision, and other medical services.

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All views expressed in this article are the author’s own and do not necessarily represent the position of Woodruff-Sawyer & Co.

Sid Bahadkar

Account Manager, International Benefits

Sid is an SHRM certified professional with experience of working in the Indian and US markets as an HR and Employee Benefits professional. Having worked closely with employees of diverse cultures, she brings a broad and enriched perspective to client solutions. As an Account Representative, she collaborates with the international team on global mobility pieces and a variety of service areas.

415.402.6438

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Sid Bahadkar

Account Manager, International Benefits

Sid is an SHRM certified professional with experience of working in the Indian and US markets as an HR and Employee Benefits professional. Having worked closely with employees of diverse cultures, she brings a broad and enriched perspective to client solutions. As an Account Representative, she collaborates with the international team on global mobility pieces and a variety of service areas.

415.402.6438

LinkedIn