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Reform of the German Parental Allowance and Parental Leave Act

German law allows employees to go on paid parental leave in addition to mandatory paid maternity leave after childbirth. Until now, the German Parental Allowance and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz, BEEG) provided for a parental allowance for a maximum duration of 12 months of paid parental leave (14 months if the other parent decides to go on parental leave as well). The allowance is paid by the state and ranges from EUR 300.00 to up to EUR 1,800.00 a month depending on the employee’s prior income.

Following reforms, an additional option dubbed “Parental Allowance Plus” will be available for parents of children born on and after 1 July 2015. Under the new rules, employees will have a right to request up to 24 months of paid parental leave (instead of 12 months) or, if both parents decide to go on parental leave, they will be entitled to 28 months of paid parental leave (instead of 14 months) to be shared between the parents. While the duration of paid parental leave doubles, the amounts paid will remain the same, ie payments will merely be stretched out over a longer period of time.

The reforms also intend to provide incentives for shared childcare responsibilities. If both parents only work between 25 and 30 hours a week, they will be entitled to an additional four months of paid parental leave. Single parents may also be entitled to an additional two to four months of paid parental leave.

For employers, however, the following aspects will be of particular importance:
• Parental leave may be taken between the child’s third and eighth birthday for a maximum duration of 24 months. The decision of how to split up the leave entitlement will not be contingent on the employer’s consent.
• Parental leave may be taken at up to three different points in time (instead of two, as is the case under the current law).
• Employees are required to indicate their leave request in writing. The employer must receive the request seven weeks before the desired start of the parental leave (in the case of parental leave before the child’s third birthday) and 13 weeks before its start if parental leave is claimed between the third and eighth birthday.
• Requests for parental leave may only be rejected in rare cases for business reasons and only within four weeks (in the case of parental leave before the third birthday) or within eight weeks (if parental leave is taken between the third or eighth birthday) after receipt of the request.
• Employees on parental leave enjoy special dismissal protection. Dismissals are only valid if the employer obtains prior consent by the relevant authority.

While the majority of Germans are said to approve of the changes, they have also been criticized. In particular, it is feared that SMEs will not be able to handle requests for longer leave and will suffer from business disruptions due to multiple long-term absences.