THE Micro, Small and Medium-Sized Enterprise (MSME) Alliance is raising concerns about Government’s plans to introduce paid paternity leave in the workplace.

Paternity leave refers to a period of absence from work granted to a father after or shortly before the birth of his child.

The MSME Alliance, a network of business organisations representing more than 300,000 MSMEs in Jamaica, said it’s unclear how the initiative will be operationalised.

Speaking at a recent Jamaica Observer Business Forum, president of the MSME Alliance Donovan Wignall said “it’s a noble proposal but we have to discuss how it’s going to be paid for”.

He said small businesses are already struggling to make ends meet with inflation and commodity prices soaring.

To that end he complained it is, “not a bad idea but at the end of the day it’s gonna come at a cost to the business — that’s time away from work for which we’d have to pay a staff to be absent or pay somebody to replace him”.

Earlier this year, Minister of Finance and the Public Service Dr Nigel Clarke announced plans to increase paid maternity leave from 40 days to three months for public sector employees.

He also disclosed that for the first time in the public service, paternity leave will be introduced for fathers of newborns, and family leave for adoptive parents who are bringing a new child into the home.

He said that the changes are coming out of the current public sector compensation review and will be facilitated by updating the Public Sector Staff Orders of 2004.

Paternity leave is not an entirely new concept to the Jamaican business landscape. Jamaica’s largest commercial bank, National Commercial Bank (NCB), has a paternity leave policy in place where fathers who are either married or have been in recognised common-law unions for at least six months can take advantage of paternity leave up to three times per year for births, adoptions and stillbirths.

Scotiabank Jamaica is also trending in the same direction with a new standard for parental leave for employees.

Scotiabank allows all fathers and adoptive parents with a new child, four fully paid weeks of parental leave.

But for the MSME sector, Wignall argues that paternity leave is easier said than done.

“We cannot afford what other countries like Canada, US and Scandinavian countries do. I think the current paternity leave set-up that we have serves us pretty fine,” said Wignall.

He further explained that the move could drastically affect productivity levels, which are already low.

“Productivity is a subjective matter. There are some companies that have very high productivity and some that have low productivity but in general — if Jamaica is considered a country with low productivity — to introduce another item of expense in a business operation that possibly will impact productivity, it will have to take some amount of proper thinking.”

He suggested that the Government would have to sweeten the deal by offering a tax credit, particularly for small businesses.

A tax credit is a dollar-for-dollar reduction of the income tax you owe.

“The Government is the one introducing this [but] the Government doesn’t run your business, and when they are ready for their taxes, if you don’t pay it you’ll end up in court or prison if you can’t pay it. If the Government chooses to implement this particular nuance in the economic space then another discussion has to take place as to how it is going to be paid for,” stated Wignall.

Looking at other countries which have implemented paternity leave on a widescale, the MSME Alliance president pointed out, “They have more than 50 per cent tax. Look at the difference. They’re almost socialist — free school, you don’t pay any money to go to university; you get healthcare absolutely free. If you don’t work, they pay you a sum per month to take care of the child but when you do work the tax rate there is phenomenal — but you see what your tax if paying for.

“For us on the other hand, our tax is still going to be high — not as high as theirs but at the end of the day we have other nuances of our existence that come into play and I shudder to say corruption is one of them that has to be considered when we think of taxes, etcetera. In those countries everybody pays their fair share, and everything that is done in terms of infrastructure development and all of that is done based on true business principles. I don’t think we have the same scenario here. We are often compared to Singapore, very good country, but if you look at the laws and the consequences of breaking those laws, I don’t think we’re ready to bear some of the consequences,” he expressed.