According to the Employment Contracts Act, time spent on parental leave is not counted as part of an employee's annual leave. However, Gender Equality and Equal Treatment Commissioner Christian Veske sent a letter to the Ministry of Economic Affairs and Communications (MKM) last year, arguing that such restrictions are unjustified.

Veske pointed out that, under the Equal Treatment Act, gender discrimination includes unfavorable treatment related to pregnancy, childbirth, parenthood and other gender-related circumstances. Additionally, the Employment Contracts Act requires employers to uphold the principle of equal treatment, meaning that employees should not be disadvantaged due to their family responsibilities compared to other workers.

MKM deliberated on the issue for several months but has now reached a position.

"We carefully considered the potential impacts of the equality commissioner's proposal on both employees and employers. Ultimately, we believe that including parental leave in the calculation of annual leave entitlement could lead to the opposite effect regarding gender discrimination, potentially worsening women's position in the labor market," said Laura Laaster, the ministry's head of public relations.

Laaster explained that parental leave is not comparable to other types of leave. While other leaves, such as maternity leave, study leave or childcare leave, serve a specific practical purpose over a shorter period, during which an employee is not usually replaced and can return to work without disruption, parental leave is significantly longer. In most cases, an employer finds a replacement for the employee during this period and their job responsibilities are transferred to the substitute.

"Parental leave is considerably longer than other types of leave — up to three years," Laaster noted.

According to MKM, allowing annual leave to accumulate during parental leave would effectively extend the total parental leave period by three months at the employer's expense, incentivizing parents to remain out of the workforce for a longer time.

"For parents having multiple children in succession, the number of accumulated leave days and the potential time spent away from work would be even greater. While the use of parental benefits by fathers has increased, 70 percent of fathers continue to work full-time. This means that an effective extension of parental leave would primarily impact women. The longer someone stays away from work, the harder it is to return," Laaster stated.

She added that this, in turn, could weaken a parent's connection to the labor market, exacerbate the gender pay gap, and increase the "motherhood penalty," referring to the impact of having children on earnings and career opportunities.

The proposed change would also significantly increase costs for employers. For example, in the case of a three-year parental leave period, an employee would accumulate approximately 84 additional leave days, which, based on the Ministry of Finance's projected 2025 average salary, would cost an employer nearly €8,000.

"If a family has multiple children in succession, employer costs would rise even further. For example, a six-year parental leave period would result in 168 additional leave days — effectively an extra six months away from work — costing the employer around €15,300. This would also affect business operations and complicate leave planning, as parents have the right to take their accrued leave at a time of their choosing immediately after returning from parental leave," Laaster explained.

MKM believes that such an additional burden could discourage employers from hiring women of childbearing age, thereby increasing gender discrimination in the labor market.

The ministry also noted that Estonia has the longest parental leave period with a high benefit rate in the European Union and further extending the time parents can stay out of the workforce could negatively impact both parents and employers.

"Thus, while the proposal may initially appear beneficial for parents, it could actually have the opposite effect. Therefore, we believe that it is not advisable to amend the current regulation," Laaster concluded.

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