New weapon against labor shortage: parental leave cooperatives

The legislation allows parents staying at home with young children to form or join a cooperative, which gives them more flexible conditions than the legal frameworks of general employment, so that the content, manner, and extent of work parents do could be decided by themselves, furthermore, members of the cooperative are also entitled to deduced social insurance contribution.

The Hungarian-owned WHC Group, which, among others, deals with labor placement, temporary employment, and recruitment, has recently launched its own parental leave cooperative, WHC Family. The company, based on the experience of their retirement cooperative, expects tens of thousands of parents with young children to work each year through parental leave cooperatives, as this will give them the opportunity to work within a flexible framework.

“The so-called atypical forms of employment, which differ from the traditional 40-hour-a-week, being present at the workplace type of employment, are becoming more and more widespread in Hungary as well. Examples are part-time employment, or student and retirement work, but remote work as well. This is a major labour market trend in the 21st century, reinforced by labour shortages, demographic processes and digitalisation, typical of developed economies. The process was also reinforced by the pandemic, which brought a revolution to the field of flexible forms of employment. Therefore, we consider the amendment of the cooperatives act to be a favourable government decision for both employers and employees, thus for the whole economy, which aims to make it easier for parents with small children on parental leave to work,” underlined Viktor Göltl, CEO of WHC Group.

WHC offers a variety of positions at its existing partners for jobseekers raising young children, and employers can also find the most suitable new colleague from a diverse range of parental leave cooperative candidates. Through the cooperative, employees can work in any sector, where it is possible to work part-time for 4-6-8 hours – whether it is a packaging job, a cashier job, or even an intellectual position, throughout the whole country.

“The change in legislation will create an opportunity for those staying at home with young children to work within a flexible framework that only this form of employment can provide. Experience has shown that, in the case of a traditional employment relationship, for example, the employer rarely adapts to the schedule of mothers, while employment through a cooperative allows, for example, to work on a schedule that varies from week to week. The latter is an outstanding advantage for employers as well in those positions which also require a high degree of adaptability from colleagues,” highlighted Göltl.

Several benefits for employers too

Employing parental leave cooperative members have several benefits also for employers. In the case of employment through a cooperative, employers can expect significantly better taxation than if they employed a parent with a small child in a traditional employment relationship, as in that case only the 15% personal income tax is deducted from the cooperative member’s salary, there is no additional social insurance contribution obligation. 

Besides that, all administrative tasks and obligations are performed by the parental leave cooperative instead of the borrowing partner company, thus removing a lot of burden from the employer. Moreover, the high degree of flexibility inherent in this type of employment is a great advantage: as a result, parents who are at home with small children are able to adapt their working hours to their own schedules, and employers are also able to fill positions which require an atypical form of employment with colleagues with the appropriate skills and qualifications.

Approximately 90,000 children are born in Hungary every year, so parental leave cooperatives can create employment opportunities for about 225,000 parents with small children each year, WHC estimates. As part of this, those who are staying at home with a young child – mothers and even fathers – receiving childcare fee (GYED) or childcare allowance (GYES) can take up work in the cooperative on favorable terms.