Peer Review on Reconciling Family Life and Entrepreneurship

Transcription

1 Peer Review on Reconciling Family Life and Entrepreneurship Belgium, June 2017 How to promote entrepreneurship as an effective way to reconcile professional and family life - reinforcing the new Spanish approach Peer Country - Spain DG Employment, Social Affairs and Inclusion Written by Elvira González Gago. May, 2017

2 EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs and Inclusion Unit C1 Contact: Dijana Ror Boone Website: European Commission B-1000 Brussels

3 EUROPEAN COMMISSION Peer Review on Reconciling Family Life and Entrepreneurship Belgium, June 2017 Directorate-General for Employment, Social Affairs and Inclusion Peer Review on Reconciling Family Life and Entrepreneurship Belgium, June 2017 May, 2017

4 Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE The information contained in this publication does not necessarily reflect the official position of the European Commission This document has received financial support from the European Union Programme for Employment and Social Innovation "EaSI" ( ). For further information please consult: European Union, 2017 Reproduction is authorised provided the source is acknowledged.

5 Table of Contents 1 Situation in the peer country relative to the host country Assessment of the policy measure Assessment of the success factors and transferability Maternity leave system for self-employed Maternity benefits Care initiatives Creation of an entrepreneurship barometer Questions to the host country in the Peer Review... 6

6 1 Situation in the peer country relative to the host country Spanish legislation defines self-employed workers as those physical persons who carry out an economic or professional activity for profit on a regular, personal, direct and freelance basis and outside the sphere of management and organisation of another person, irrespective of whether they hire employed workers or not 1. This definition extends to the relatives of the self-employed who work regularly on that economic or professional activity and do not have the status of employees (family workers 2 ) on the one hand; and also to members or certain executive posts of companies of different types on the other. The Statute includes also the definition of economically dependent self-employed worker (trabajador autónomo económicamente dependiente, TRADE worker) as those self-employed workers whose economic activity is carried out for a single client on which they depend for at least 75% of their income. Self-employment plays a significant role in the Spanish economy. According to Eurostat, in 2016, the share of the self-employed was about 16.4% of total employment in Spain, versus a rate of 14% in Belgium. The Spanish share is 1.8 percentage points higher than EU28 average (14.6%) and ranks Spain in eighth position 3. Around 3.2 million self-employed workers were registered with the Spanish Social Security system at the end of The figure has fallen from 3.3 million since the end of 2008 due to the impact of the economic crisis, resulting in an overall decline of 3.2% during this period. Good news is that, after a minimum reached in 2012 (3.1 million), the number of self-employed workers has recovered continuously from 2013 onwards 4. Self-employed workers are divided in Spain into two major groups: physical persons (workers who personally perform an economic activity), who represented 61.4% 5 of the total in 2016 amounting to 1.9 million, and the group called associates (societarios, self-employed people who organise their activities through an institutional legal umbrella such as commercial companies, family collaborators, family of partners, or members of professional bodies) representing the remaining 38.6%. The vast majority of the self-employed who are physical persons do not have employees (78.1% in 2016). Of those who do have employees, around 53% employ only one worker. As observed in Belgium, self-employment typically remains a male-dominated affair, with women in Spain being also only one third of the total number of selfemployed persons (men account for 65.3% of physical persons). Almost one-half (45.5%) of the group was aged between 40 and 54 in 2016, with around one-quarter aged over 55: only 30% of self-employed workers in Spain is younger than 40. Regarding sectors, 86.3% of women work in the service sector (compared with 65.9% of men), 9.8% work in agriculture (13.0% for men), 2.8% in industry (5.4% of men) and only 1.0% in the construction sector (while 15.7% of men) 6 Regarding social protection, self-employed persons in Spain are required to register with the Social Security system, where they are included in the Special Scheme for Self- Employed Workers RETA scheme. This scheme also includes professionals, associate 1 Law 20/2007 on the Self-Employed Work Statute of July 2007, Ley del Estatuto del Trabajador Autónomo 2 Relatives include, for this purpose, the spouse, descendants, ascendants and other relatives by consanguinity or by marriage, up to the second degree and, if appropriate, by adoption, living in in the same address as the self-employed person. 3 Source: Eurostat, last update on the 25 April 2017, extracted on the 29 May Rodríguez-Cabrero, G., Arriba, A., Marbán, V., Montserrat, J. and Moreno-Fuentes, F. J. (2017) ESPN Thematic Report on Access to social protection of people working as self-employed or on non-standard contracts, European Commission Rodríguez-Cabrero, G., Arriba, A., Marbán, V., Montserrat, J. and Moreno-Fuentes, F. J. (2017) ESPN Thematic Report on Access to social protection of people working as self-employed or on non-standard contracts, European Commission Source: MEYSS, Spanish Ministry of Employment and Social Security, 4 th Quarterly Report on Self- Employment 2016 available at: May,

7 workers and cooperative members 7. They have similar access (subject to some specific arrangements) to social protection as those employees insured under the General Scheme of Social Security (hereafter the General Scheme ) and are entitled to: a) In-kind benefits: healthcare in cases of maternity, common or occupational disease, and accidents (whether work-related or not). b) Cash benefits: in case of temporary incapacity, pregnancy, maternity, paternity, breastfeeding, permanent invalidity, old-age, widowhood, and having dependent children. Insurance against temporary incapacity due to common illness ( common contingencies ) is mandatory for all RETA workers (except for self-employed agricultural workers). Insurance against occupational contingencies, including temporary incapacity due to accident at work or occupational disease, is voluntary for the self-employed except for the economically dependent TRADE workers, for whom it is compulsory. Finally, insurance against cessation of business activity is voluntary for all self-employed workers. The above mentioned cash benefits received in cases of pregnancy, maternity, paternity, breastfeeding, having depending children depend on the contribution base and the effective social security monthly contributions made by the self-employed worker. Each self-employed worker determines their contribution base and the monthly contribution, with a minimum limit of 287 and a maximum of 1230 per month. Within this context, 86.1% of self-employed workers choose the minimum contribution base (in order to pay lower contributions), with an important difference regarding gender: the rate is 84% for men whereas it rises to 90% for women. On the contrary, only 0.8% choose a high contribution more than 3 times the minimum contribution base; the ratio is 1% for men whereas only 0.5% for women 8. As social protection is closely linked to the contribution bases, these lower contributions paid by women will lead to lower levels of protection and, especially, lower pensions, with an increased risk of poverty rates among self-employed women. Regarding maternity protection, self-employed women are entitled to the same maternity benefits as women insured under the General Scheme; maternity leave is available for up to 16 weeks (up to 10 of which may be transferred to the father 9 ), and implies an allowance equal to 100% of the corresponding regulatory base (around 900 per month if the self-employed mother was contributing the minimum base). Mothers and fathers may enjoy part-time rest periods, but the maximum reduction for fathers is 50% (there are no limits for mothers). In contrast to the recent reform introduced in Belgium, payment of social security contributions should continue in Spain in situations of temporary incapacity, risk during pregnancy, risk during breastfeeding and periods of rest due to maternity or paternity. 2 Assessment of the policy measure Since 2007, the Spanish government has implemented a series of major institutional changes aimed to increase the level of social protection of self-employed workers, in order to enhance convergence between the RETA scheme and the General Scheme. The basis of this new comprehensive scheme has been the adoption of the Law 20/2007 on the Self-Employed Workers Statute in July 2007, aimed at becoming the basic regulation of self-employment work. Main changes defined by this Law included: the definition of voluntary insurance contributions to protect against occupational diseases, 7 Since 2008, self-employed agricultural workers are also included (Law 18/2007). 8 Spanish Ministry of Employment and Social Security (MEYSS), Monthly Report on Self-Employment Work Physical Persons, March 2017, 2016, available 9 Paternity leave is available for up to four weeks (from 1 January 2017), and is also paid at 100%. May,

8 the cessation of activity, and the risk of accidents at work; the above mentioned definition and special protection of TRADE workers; the adaptation of unemployment benefit rules to self-employment; and the regulation of the reconciliation of professional and family life. Another key element of the new institutional framework for self-employment was introduced by Law 32/2010, passed in August 2010, which established a specific system of protection for the cessation of activity of self-employed workers, further developed by the Royal Decree-Law 1541/2011 that came into force in November The Law has regulated the possibility to make voluntary insurance contributions to protect against the cessation of activity. The Law also included some very minor considerations regarding the cessation of activity combined with maternity and parental leave. More recently, in order to boost self-employment as an alternative way out of the economic crisis and the lack of jobs, the Government approved in February 2013 the Royal Decree-Law 4/2013, on measures to support entrepreneurship and stimulate growth and job creation. This regulation was encompassed within the framework of the Spanish Strategy for Entrepreneurship and Youth Employment (SEYE), as well as in the objectives of the Youth Guarantee and several European recommendations on the subject. One strategic approach adopted by the SEYE is to improve social protection for the selfemployed. Thus, the Royal Decree-Law 1/ incorporates Social Security benefits in those cases in which the self-employed professional must attend to family obligations that influence his/her activity. This regulation entitles self-employed workers to the possibility of temporarily ceasing their activity to devote to family needs provided that s/he is replaced by an employee, by introducing a bonus related to hiring. It consists of a 100% bonus of the self-employment contribution for common contingencies, for a maximum of 12 months, for those self-employed without employees who reduced their working hours for one of two reasons: a) care of children under 7 years of age; b) having a charge of a family member, by consanguinity or by marriage up to and including grade 2, in a situation of dependence 11. On the other hand, Law 31/2015 on Self-employed Workers, passed on September 2015, modified and updated the regulations on self-employment and adopted measures to promote self-employment and the social economy. It thus amended the Selfemployed Workers Statute. One of its main features is the inclusion of specific measures aimed to promote the reconciliation of professional and family life, such as the possibility that TRADE workers can hire a worker in cases of risk during pregnancy and breastfeeding, maternity or paternity, care of children under seven years or other family member in a situation of dependency or disability. This is the only exception made to the requirement of not employing third parties to be considered a TRADE worker. The reason behind is to allow the continuity of the activity performed by the TRADE worker and avoid disruption of the relationship with the client with which s/he holds at least 75% of their activity. Also, Law 31/2015 introduced subsidies in Social Security contributions (100% of the contribution base) to those self-employed workers who are replaced through subsidized interim contracts of unemployed workers during periods of maternity, paternity, adoption, foster care, risk during pregnancy and risk during breastfeeding. This is also 10 Royal Decree-Law 1/2015, of Second-chance mechanism, reduction of financial burden and other social measures ( Ley de mecanismo de segunda oportunidad, reducción de carga financiera y otras medidas de orden social ). 11 Law 39/2006, on Promotion of Personal Autonomy and Assistance for Persons in a Situation of Dependency defines three levels of dependency (mild, moderate, severe) with dependents ranked according to an official scale. May,

9 applicable to members of cooperative societies who are replaced during the above mentioned circumstances (not only by unemployed workers). There is no readily available data about the impact these measures may have had on the evolution of self-employed women, nor on their maternity experiences. There is no readily available data either about the cost of this measure. Finally, a legislative proposal (122/000043) for a Law of Urgent Reform to Selfemployment Work (Ley de Reformas Urgentes del Trabajo Autónomo) is currently under discussion at the Spanish Parliament. Within this framework, the approval of a series of measures to favour self-employed mothers who return to their professional activity in the two years after maternity is expected to provide the same benefits enjoyed by General Scheme workers. 3 Assessment of the success factors and transferability Recent reforms on the Spanish Social Security Scheme for self-employed workers have been focused on reducing social security contribution rates rather than: a) emphasising the need to improve the very low autonomous workers contribution records so as to improve their cash benefits; and b) extending benefit coverage. As described above, social protection is closely linked to the contribution bases and the types of protected contingencies so any of these measures will lead in the long run to increased risk of poverty rates among the groups concerned. In order to avoid this situation, as well as to provide the Spanish system with increased flexibility to meet the needs and expectations of self-employed people, it is necessary to emphasize measures related to maternity benefits and care initiatives. 3.1 Maternity leave system for self-employed The maternity leave system differs between Belgium and Spain in terms of duration and flexibility: while Belgian self-employed women are entitled to maternity leave of maximum 12 weeks, of which 3 weeks is compulsory, the period in Spain is for up to of 16 weeks, with 6 weeks being compulsory. Although the duration is higher in Spain, the number of compulsory weeks makes the system less flexible. There is another difference regarding flexibility, as self-employed women in Belgium are obliged to take 1 of the 3 compulsory weeks before giving birth, while there is no restriction regarding the period before giving birth in Spain so women have more options to decide depending on their individual needs. On the other hand, up to 10 of the 16 weeks of maternity leave may be transferred to the father under the Spanish scheme (which is taken up in barely 5% of the cases), but there is no transfer possibility in Belgium except in the event of the death of the selfemployed mother. Besides, paternity leave is available in Spain for spouses of selfemployed mothers for up to four weeks, while fathers cannot claim this right in Belgium. Both facts help to perpetuate that reconciliation of work and private life continues to be mainly a women s issue. But the situation in Belgium does not seem better than in Spain. Finally, during the non-compulsory period of maternity leave, the self-employed woman can exercise her normal self-employed activity (at least) part-time in both countries. This implies greater flexibility for Belgian self-employed women, who are allowed to progressively resume their professional activities from the third week following childbirth, while in Spain it is not permitted to resume activity until the seventh week. 3.2 Maternity benefits With this regard, the maternity benefits implemented by the Belgian federal social security scheme for self-employed persons is a lesson from which Spain could learn, specifically the ones related to extend benefit coverage. In particular, the exemption from paying social security contributions during the maternity, paternity and childcare May,

10 related leave in the Belgian scheme is a most interesting idea, which is in fact being discussed at present in Spain in the framework of the mentioned legislative proposal 122/000043, Law of Urgent Reform to Self-Employment Work. On the other hand, the introduction of service vouchers could be further explored in Spain in order to improve the situation of self-employed parents who resume their professional activity and who juggle this with household and childcare responsibilities. Spain, unlike Belgium, has no tradition in the use of this scheme, but it has been introduced in some Autonomous Communities (such as Castilla y León 12 ). This idea could be interesting in the context of above mentioned new legal reform underway (Legislative Proposal 122/000043), which foresees the approval of a series of measures to favour the reconciliation of selfemployed workers and their family life. The introduction of this scheme would be of major interest in Spain not only from the self-employed persons point of view but also from the employment creation perspective, as it is a tried and tested system for creating valuable jobs, combatting undeclared work and (re-) integrating high-risk groups of unemployed people into the labour market. 3.3 Care initiatives The introduction of complementary measures in the field of care initiatives in Belgium, such as the informal care (mantelzorg/aidant proche) is also of major interest as it allows self-employed persons to keep (at least part of) their activity despite the serious illness of their child or the palliative care for their child or partner. This is the philosophy of the Law 39/2006 on Personal Autonomy and Dependent Care that came into effect in Spain on 1 January This law recognises the universal nature of benefits and the entitlement to access them for all elderly or disabled people who need help carrying out basic daily living activities, and it includes benefits for caregivers 13. Notwithstanding the above mentioned, when implementing these two initiatives it is necessary to pay attention to gender effects in order to avoid: a) perpetuating stereotypes of women in the labour force as mothers and caregivers: reconciling measures should also apply to self-employed men with family responsibilities; in addition, they must be complemented with measures aimed at joint responsibility (assuming the tasks of caring for men and women alike); and b) generate a worsening of working conditions for carers (95% women), as it happened in Spain when the Central Administration stopped paying benefits under Law 39/2006 to non-formal carers and, as a result, more than women left the Social Security System in one month. 3.4 Creation of an entrepreneurship barometer Finally, there is no systematic monitoring of self-employment activity in Spain, taking into account gender aspects and reconciliation of family and work life issues. This creates a gap with a lack of public policies adapted to address needs in this area. Thus, the adaptation of the Belgian female entrepreneurship barometer to Spain would be of major interest in order to gather and monitor clear data on the evolution of male and female entrepreneurship. This could provide the basis for further policy reforms adapted to the needs for reconciling family life and self-employment in Spain. 12 Reconciliation program: Care service support due to emergencies and family contingencies based on service voucher (Programa de conciliación: Servicio de atención por situaciones de urgencia e imprevistos familiares, a través del sistema cheque servicio) 13 Law 39/2006 has not been properly developed still due to some discrepancies between the administrations in charge (the central government and the autonomous regions) as well as to the obstacles encountered on the provision of financial resources. May,

11 4 Questions to the host country in the Peer Review Are there any differences between the number of children of self-employed mothers and regular workers in Belgium? Are there any detectable changes in the trends? Which administration is responsible for the mantelzorg/aidant proche scheme? Which is the origin of the funds for the benefits (national, regional)? Which is the gender distribution and its evolution among carers under this scheme? Who manages the service vouchers scheme and how? Who is responsible for certifying participant enterprises? What are the services provided under this scheme? What were the main barriers in the implementation of this scheme? How does the female entrepreneurship barometer work? Which sources of information does it use? Do the regions / cities contribute data? Are there public results (website, reports, etc.) available? What is the role of social NGOs (providing services paid by vouchers, etc.)? What is the average pension of self-employed workers? How does this compare with the average pension under the General Scheme? What is the average poverty rate among self-employed workers compared with the rate under the General Scheme? What is the rate among retired self-employed workers compared with workers retired under the General Scheme? May,

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