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Better social protection for SMEs: new EU legislation

Eugene Eteris, European Studies Faculty, RSU, 05.08.2010.

During Spanish and Swedish Presidencies in the EU in 2009-10, and with the assistance from the European Parliament (e.g. Mrs. Astrid Lulling’s Report), the agreement was reached on an important issue. Self-employed workers can gain maternity and pension benefits under the new EU law. At the EU level, this is the first time a maternity allowance has been granted to self-employed workers.

The new Directive on self-employed workers and assisting spouses (Directive 2010/41/EU) repeals and replaces an earlier law (Directive 86/613/EEC) and improves the social protection rights of millions of women in the labour market, as well as strengthening female entrepreneurship. Presently, only one in three entrepreneurs is a woman.

Self-employed workers and their partners will enjoy better social protection – including the right to maternity leave for the first time – under new EU legislation that entered into force on 4^th August 2010.

Commission’s opinion

"With the entry into force of this new law, Europe takes an important step forward in terms of increasing social protection and providing equal economic and social rights for self-employed men and women, and their partners. The new law ensures full equality in practice between men and women in working life, promoting female entrepreneurship and allowing self-employed women to enjoy better social security protection. I call on all Member States to start implementing the Directive swiftly so that citizens can see the benefits in their daily lives."

Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship, Vice-President of the European Commission. Brussels, 4 August 2010

Short history

Self-employment is a significant – albeit minority – form of employment in Europe, representing around 16% of the active population.

Around 11% of self-employed workers in Europe rely on the help of spouses and partners who work on an informal basis in small family businesses, such as a farm or a local doctor's practice. These assisting spouses are traditionally completely dependent on their self-employed partner. As such, they are at a high risk of poverty in the event of divorce, their partner’s death or bankruptcy.

As far as employees are concerned, the EU recently adopted a new Directive improving the right to parental leave and the Commission's proposal for a revised Directive on maternity leave is currently in first reading by the European Parliament.

The European Parliament approved the legislation on 18 May 2010 and it was endorsed by the EU member states on 7 June. It considerably improves the protection of female self-employed workers and assisting spouses or life partners of self-employed workers, particularly also in case of maternity. They are granted a maternity allowance and a leave of at least 14 weeks, should they choose to take it. At EU level, this is the first time a maternity allowance has been granted to self-employed workers.

The new rules also serve to encourage entrepreneurship in general and among women in particular. There is a currently a major gender gap in this area – only 30% of entrepreneurs in Europe are women.

Finally, the provision on social protection for assisting spouses and life partners (recognised as such in national law) is also a considerable improvement from the 1986 Directive. They will have the right to social security coverage (such as pensions) on an equal basis as formal self-employed workers, if the Member State offers such protection to self-employed workers. This will help provide a stronger social safety net and prevent women from falling into poverty.

The EU Member States now have to introduce the Directive into their national laws within two years; this is so-called Directive’s transposition time. Only when there are particular difficulties could this period be extended by some member states, for another two years to implement the assisting spouse’s provisions.