Employers’ 12 proposals to cut unnecessary red tape reach government table
The Estonian Employers’ Confederation has collected nearly 170 suggestions on how to reduce the administrative burden and red tape that hampers business. The 12 proposals with the broadest impact and the quickest implementation will reach the Cabinet of Ministers this week. The changes could be implemented as early as this spring.
Businesses are most concerned about procedural and reporting issues, secondly about requirements and obligations imposed on businesses, and thirdly about stricter transposition of EU requirements. More than 150,000 of our businesses are burdened by excessive requirements.
However, requirements that do not add value and unnecessary administrative burdens are not just a pain for businesses. Every inefficient or unnecessary move is paid for by society as a whole – whether it is the creator of the requirement, the person who subsequently controls its implementation or the employee in some companies who brings it to the table. All pointless requirements make production or the provision of services more expensive in Estonia. This is not apparent in everyday life, but it is reflected in the customer’s price tag. What is harder to measure is the time and energy lost that could have been spent on something that would have been of benefit to businesses and society.
12 suggestions to start cutting red tape
More than 150 000 businesses are affected.
1. Refrain from asking for duplicate data
The state asks for data already provided by businesses in various statistical reports and other data transmission formats.
Proposal: develop information systems and enable cross-use of data and harmonise data formats, automate data transmission, i.e. pre-filling.
2. Speed up detailed planning procedures
The obligation to draw up detailed plans is unreasonably broad.
Proposal: define the need for detailed planning in justified cases and develop deadlines and incentives for local authorities to speed up procedures. Shorten the time limits for procedures.
3. Reduce red tape when hiring a worker with reduced work capacity.
When hiring a disabled or partially disabled worker, the employer has the possibility to get a social tax credit, but this must be applied for separately.
Proposal: to make the decision on the refund of social security contributions automatic for the employer.
4. Eliminate unnecessary auditing
Inefficient management companies spend thousands of euros a year, time and energy on auditing.
Proposal: to exempt administrative companies with no economic activity from the obligation to have an audit or to make it an obligation for example more than two years old. Consider raising the threshold for audit engagement for companies with a small volume of economic activity.
5. Digitise the process of recruiting foreign workers
The process of dealing with labour migration is complex, fragmented and non-digital.
Proposal for a single and automated information system on aliens’ admission procedures. This will allow for improved monitoring of aliens and reduced risks.
6. Do away with unnecessary instructions
Proposal: abolish the obligation for the employer to draw up instructions for the use of work equipment and instructions for the work to be carried out, if the information in the safety instructions for the use of work equipment and in the risk assessment serves the same purpose.
7. Do not tighten up waste and packaging legislation compared to Europe.
The draft Estonian Waste and Packaging Act sets different and stricter targets for producers than European regulations.
Proposal: to waive the stricter requirements of EU law.
8. Do away with burdensome risk assessments
In a workplace with more than one employee, the occupational environmental specialist must carry out an occupational risk assessment and draw up an action plan to eliminate the hazards or reduce their impact.
Proposal: to remove the obligation to carry out a risk assessment and to designate a specialist in organisations with fewer than 10 employees and in sectors where the likelihood of a serious accident at work is low.
9. Make employment contract law more flexible
Every change of workload has to be formalised in an employment contract and creates a lot of red tape. Contracts of employment contain a large number of mandatory statutory provisions which must be duplicated in the contract. All contracts must be amended when the law changes.
Proposal: reduce the mandatory elements of the employment contract and allow flexible working arrangements.
10. Refrain from auditing projects repeatedly
Multiple checks on projects funded by the euro by different agencies create unnecessary workload and time. Checks and audits can come years after the activities have taken place, when the people responsible for the project have left their jobs.
Proposal: reduce the monitoring burden to the minimum necessary.
11. Waive sustainability reporting obligations
Sustainability reports have already cost Estonian businesses hundreds of thousands of euros, but their benefits and impact are questionable.
Proposal: to make CSRD (Corporate Sustainability Reporting Directive) and CSDDD (Corporate Sustainability Due Diligence Directive) reporting and auditing voluntary.
12. Transpose the Wages Directive as a minimum.
The implementation of the Pay Transparency Directive will be a big job for employers. Defining occupations and salary ranges is complicated.
Proposal: transpose the Directive with a minimum of transposition and using the data already available, so that businesses do not have to collect additional information.
The full overview of the proposals received can be found at www.employers.ee/halduskoormus
The Confederation of Employers also looks forward to action on all the other proposals put forward and plans to regularly monitor progress and provide feedback to its members.