Key Changes to the Employment Contract Act in 2024: What You Need to Know
As of 2024, several important amendments to the Employment Contract Act have come into effect, significantly impacting both employees and employers. These changes address working hours, minimum wage, parental leave rights, and other crucial aspects of the labor market. Below are the main updates that each party to an employment contract should be aware of.
Abolishment of Variable Hour Agreements: Starting June 2024, it is no longer possible to make variable hour agreements in retail. These agreements, which allowed employees to work up to an additional eight hours per week, proved too bureaucratic. Although the previous system offered flexibility, it was rarely used by employers. Discussions are now underway on how to make working hour regulations more flexible to better accommodate the interests of both employers and employees.
Increase in Minimum Wage: In 2024, the minimum wage rose to €820, which is €95 more than the previous year. According to the agreement, the minimum wage will gradually increase and is expected to reach 50% of Estonia’s average wage by 2027. This change is a significant step toward raising employee income and improving living standards.
Changes to Work and Rest Time Requirements: Work and rest time requirements have changed significantly in line with a new European Court decision. Employees must now be granted a daily rest period of 11 hours, which no longer counts as part of the weekly rest period. Additionally, employees must receive either 36 or 48 hours of weekly rest time. These changes to the Employment Contract Act in 2024 aim to protect employee health and prevent overwork.
Equalization of Parental Leave: Parental leave rights now apply equally to all parents, regardless of gender or family composition. For example, same-sex parents may use paternity leave if the other parent is on maternity leave. This change ensures fairer treatment for all families.
Discontinuation of the Trial Work Service: As of 2024, the Unemployment Insurance Fund has discontinued the trial work service, which previously allowed job seekers to try out a job before signing a contract. This change means job seekers can no longer use this service to assess suitability.
These 2024 amendments to the Employment Contract Act highlight the importance of carefully reviewing your employment contract.
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