Paid Parental Leave

Taking time away from work for a new baby is a common part of working life. The Paid Parental Leave scheme will help parents spend more time at home with a new baby, and help employers keep skilled and valuable staff. So what else does the employer need to know?

Much has been written about the Government’s Paid Parental Leave scheme which became effective from 1 January 2011. And it is important to consider that utilising such a scheme can assist businesses with retaining talented staff and/or help them attract similarly qualified staff.

Just to recap, the Australian Government introduced the first national Paid Parental Leave scheme effective 1 January 2011. The scheme provides ‘eligible working parents' with 18 weeks of pay at the weekly rate of the national minimum wage (currently around $570 per week (before tax)). No Superannuation is payable on Paid Parental Leave payments.

Note this scheme is fully funded by the Federal Government.

The period of Paid Parental Leave is not in addition to the period of unpaid leave (i.e. standard 12 months unpaid leave). Therefore the period of Paid Parental Leave is included and forms a part of the total leave period taken.

Although introduced, organizations don’t have to be responsible for providing such payments – meaning until 30 June 2011, they are not required to process payments through their payroll system. Employees are able to claim entitlements directly from the Government (i.e. Family Assistance Office). Notwithstanding, employers are of course at liberty to make such payments!

Where organizations already provide paid ‘maternity’ leave payments, the Government's Scheme is not affected, suffice to say, employees can avail themselves of both.

So how should Employers prepare for the introduction of Paid Parental Leave? Employers should consider:-

changes to their payroll system to accommodate such payment;
reviewing employment contracts and/or [relevant] polices as they may need amendments;
if the current industrial instrument (i.e. Enterprise Agreement) provides an existing paid parental scheme, negotiations for different benefits may be appropriate.

The Government has undertaken to conduct a review of this scheme two (2) years from its commencement, with this review being completed by the end of 2014. Any changes to this scheme will be announced after this time.

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