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Compliance News

Lockton Global Compliance

Guernsey to mandate auto-enrollment in an occupational pension scheme

The government of Guernsey recently approved legislation requiring the mandatory, automatic enrollment of employees into either a government-facilitated defined-contribution scheme (Your Island Pension- YIP) or a qualified, employer-sponsored pension plan.

Contributions will start at 1% for both the employer and the employee. The contribution rate will automatically increase annually until it reaches 3.5% for employers and 6.5% for employees in 2030.

The auto-enrollment requirement is expected to enter into effect on 1 October 2023.

Hungary

Hungary expands family leave entitlements

The Hungarian government recently passed significant employment legislation to introduce parental and carer’s leave entitlements, double the number of paternity leave days and introduce a right to request flexible work arrangements. The legislation brings Hungary into alignment with the European Union Directive No. 2019/1158 on work-life balance for parents and carers.

The amendments to the Hungarian Labor Code provisions entered into effect on 1 January 2023.

Switzerland

Switzerland establishes paid adoption leave

The Swiss government recently passed amendments to the Swiss Code of Obligations (“CO”) and to the Loss of Earnings Compensation Act (“LECA”), granting ten working days of government-paid adoption leave to employees who adopt children under the age of four. The leave entitlement went into effect on 1 January 2023.

Slovakia

Slovakia reforms its pension system

The Slovak government recently introduced a reform to its pension system to increase retirement savings and benefits. The reform introduces several amendments to the first pillar of the retirement program, including the introduction of a new parental pension supplement, elimination of the normal retirement age cap, and the possibility of early retirement. The reform also introduces several changes to the second pillar of the retirement program, including the automatic enrollment of first-time workers under the age of 40 and a change in the default investment option. The changes are effective 1 January 2023.

Canada

Canada introduced a new federal holiday [updated]

The Canadian government approved Bill C-5 introducing a new federal holiday called the National Day for Truth and Reconciliation to commemorate the victims and survivors of the indigenous residential schools. The new federal holiday is observed on 30 September each year, with the first being 30 September 2021.

Netherlands

The Netherlands to reform its pension system

On 22 December 2022, the Dutch House of Representatives approved the draft bill of the Future of Pensions Act (in Dutch: Wet toekomst pensioenen – WTP). The legislation, which goes before the Senate in January 2023, aims to implement reforms of the Dutch supplementary pension system that were agreed upon between employers, employees, and the government in 2019. The WTP introduces several important changes, notably the obligation to provide occupational pension schemes on a defined contribution (DC) basis only instead of a defined benefit (DB) provision accrual.
If the Senate approves, the WTP will come into effect on 1 July 2023. A transition period until 1 January 2027 applies for employers and pension providers to implement the changes in consultation with the employees and/or their representatives.

China

China launches a new voluntary private pension scheme

On 25 November 2022, the Chinese government launched the pilot phase of a voluntary tax-favored private pension scheme under the third pillar of the country’s pension system. This new scheme aims to assist China in overcoming gaps in its current pension system as the country struggles with one of the most rapidly aging populations in the world, according to the World Health Organization.

UAE

UAE introduces mandatory unemployment insurance scheme [Updated]

The United Arab Emirates (UAE) government recently introduced – for the first time – a mandatory unemployment insurance scheme. The scheme aims to protect employees who lose their jobs for reasons out of their control, by ensuring the availability of unemployment income for up to three months. The Involuntary Loss of Employment (ILOE) insurance scheme, as announced by the Minister of Human Resources and Emiratization in May 2022, came into effect 1 January 2023.