Q4 2022 International Benefits Update
January 30, 2023
In Q4 2022, several European countries updated their family leave entitlements to the 2019 EU Work-Life Balance Directive. For example, Belgium and Romania introduced carer’s leave, and a few countries updated their social security contributions. In other parts of the world, Mexico doubled its paid vacation amount and Australia launched a new leave for domestic violence.
Argentina Increases Pension, Prepaid Private Health ContributionsArgentina increased its public pension rate by 15.53% and began paying a monthly bonus of up to ARS 7,000 pesos to lower-income old-age pensioners. The change took effect in September 2022. From October 1, 2022, the contribution rate for prepaid private medical insurance increased from 11.34% to 11.53%.
Mexico Doubles Paid Vacation Days
Effective January 1, 2023, Mexico increased minimum employer-paid vacation from six to 12 days annually. The vacation increase applies to all employees and becomes effective after one year of service.
Australia Introduces Paid Family and Domestic Violence LeaveThe Australian government passed a bill that provides 10 days of family and domestic violence leave. The employer-paid leave applies to all employees—including full-time, part-time, and temporary employees—and will be available per calendar year. For employers with 15 or more employees, the leave will be available from February 1, 2023, and from August 1, 2023, for employers with fewer than 15 employees. As per current legislation, family and domestic violence is defined as threatening, violent, or emotionally abusive behavior by the employee’s immediate family or a person related to aboriginal roles.
Malaysia Rolls Out Paternity Leave, Updates Other Family Leave ProvisionsThe Malaysian government rolled out several changes effective Jan. 1, 2023. The government launched paternity leave of seven consecutive days, which will be paid by the employer. Employer-paid maternity leave increased to 98 days from the previous 60 days. Sick leave and hospitalization will now be recognized as separate benefits, with employees getting 60 days paid hospitalization leave per calendar year along with the existing paid sick leave entitlement. Additionally, employers are required to option prior approval from the director-general of labor before hiring foreign employees.
South Korea Makes Smallest Increase to National Health Insurance RateSouth Korea announced a 0.1% increase to the National Health Insurance premium rate for 2023. The total premium rate is 7.09%, with employers and employees each contributing 3.54% each. This is the smallest increase since 2018.
South Korea Increases Tax-Exempt Meal AllowanceEffective January 1, 2023, the South Korean government increased the tax-exempt amount for meal allowance from KRW 100,000 to KRW 200,000 per month. This increase marks the first time the amount has been changed since 2004.
Thailand Offers Temporary Rate Reduction for Social Security Contributions
In an effort to help individuals deal with financial uncertainty due to COVID-19, the Thailand government has temporarily reduced employee and employer contribution rates to the Social Security Fund (SSF) made in October 2022 through December 2022. The contribution rate will lower to 3% from 5% of total pensionable salary, with maximum monthly contribution of THB 450, down from previous THB 750. Additionally, the monthly flat-rate contribution amount individuals with voluntary SSF coverage pay has been lowered to THB 240 from THB 432.
Europe, the Middle East, and Africa (EMEA)
Belgium Introduces Carer’s LeaveEmployees in Belgium can now take up to five days of unpaid carer’s leave to care for sick family members. The leave is available per calendar year, and employees are protected from employment termination during this time. The change took effect on October 7, 2022, and follows the 2019 EU Work-Life Balance Directive.
Croatia Increases Employee Tax-Free AllowancesCroatia increased tax-free employee allowances from October 1, 2022. Employers can grant up to HRK 10,000 for severance pay on an employee’s retirement, HRK 6,000 for food allowance, up to HRK 5,000 per year as an occasional reward, and HRK 7,500 per year for monetary work awards and additional remuneration.
Estonia Rolls Out Measures to Help Older ResidentsIn an effort to help older residents from financial disruptions caused by Russia’s invasion of Ukraine, the Estonia government has rolled out a few measures. In November 2022, the government paid outstanding old-age benefits owed by Russia for the months of July, August, and September 2022. Old-age, disability, and child benefit recipients also received a one-time bonus of EUR 50. Additionally, the basic flat-rate component of the social assistance national pension and the social insurance old-age pension has increased by EUR 20 a month from January 1, 2023.
France Increases Social Security Salary CapFrance has increased the social security salary cap from EUR 3,428 to EUR 3,666, effective January 1, 2023. The daily ceiling is EUR 202. The ceiling or salary cap is an employee’s maximum taxable salary for calculating pension contributions and other social taxes.
Ireland Introduces Statutory Sick LeaveEffective January 1, 2023, employees in Ireland can take up to three days of employer-paid sick leave. Sick leave implementation is phased out over a four-year period, with sick leave increasing to five days in 2024, seven days in 2025, and 10 days in 2026. Employers are required to pay statutory sick pay at a rate of 70% of the employee’s daily wages up to a maximum of EUR 110.
Portugal Lowers Retirement AgeEffective January 1, 2023, Portugal lowered its normal retirement age from 66 years and seven months to 66 years and four months. The retirement age will remain the same in 2024. The change is in response to the country’s average life expectancy during the COVID-19 pandemic. Since 2015, the normal retirement age has been adjusted annually based on changes in average life expectancy at age 65.
Romania Enacts Changes to Family Leave EntitlementsRomania enacted several changes to its family leave entitlements effective October 22, 2022. Employees in Romania get five days of employer-paid carer leave per calendar year to care for sick family members. Employees are also entitled to 10 days of employer-paid family emergency leave annually. Paternity leave is doubled to 10 working days, up from the previous five days. Male employees can take an additional five days of paid paternity leave after completing a childcare training certificate. These changes are in response to the 2019 EU Work-Life Balance Directive.
Slovakia Introduces Parental Pension, Other Changes Under Pension ReformsSlovakia introduced several changes under pension reforms, effective January 1, 2023. The government has launched a new pension supplement called “Parental Pensions” for parents with one or more adult children in insured employment in Slovakia. The benefit will be equal to a maximum monthly benefit of EUR 21.80 per parent, per child. New employees under the age of 40 will be automatically enrolled in the Defined Contribution retirement program. The retirement contribution rate will remain the same through 2024, increasing to 5.75% for 2025 and 2026, and to 6% from 2027. The normal retirement age, previously capped at 64 years, is changed to increase with life expectancy. Employees with at least 40 years of insured employment can take early retirement.
Spain Increases Pension ContributionEffective January 1, 2023, Spain increased pension contributions by 8.5%, and non-contributary pensions by 15%. The social security ceiling (general regime) is EUR 4,495.50 per month and EUR 53,946 annually. The joint maximum annual contribution limit is EUR 60,000 per year, subject to an increase due to other eligible factors.
Sweden Releases Pension Reform DetailsThe Swedish government enacted reforms to its guarantee pension (garantipension) program in early 2022. The government has released details for changes under the pension reforms, effective August 2022. For single pensioners, the maximum monthly guarantee pension increased to SEK 9,781, up from SEK 8,779, and for married pensioners from SEK 7,853 to SEK 8,855. The maximum monthly earnings-related pension income a guarantee pensioner can receive has risen to SEK 14,882 from SEK 12,794 for singles and from SEK 11,389 to SEK 13,477 for married individuals. From January 1, 2023, pensioners living outside of Sweden will no longer receive guarantee pension. For ITP 1 pension plans, the employee’s monthly salary will be capped at 30 times the monthly published Income Base Amount (IBA), and benefits accrual is increased from 65 to 66 years of age. Eligibility for long-term disability coverage will increase to age 66 under both plans. The ITP 1 plan is a defined contribution plan for salaried employees born after 1978, while the ITP 2 plan is a defined benefit arrangement for employees born before 1979 who are covered by a collective bargaining agreement signed prior to April 26, 2006. No changes were made for ITP 2.
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