What is paid parental leave?
In Australia, parental leave is a benefit most employees enjoy. The Paid Parental Leave scheme is a fully Government-funded program that was introduced by the Australian Government in 2011 to help working parents spend more time at home with their new baby or adopted child. The scheme applies to every employer, regardless of their size. According to the Fair Work Act, the worker must have been with their employer for at least 12 months to qualify for paid parental leave.
When can parental paid leave be taken?
Pregnant employees can start their leave up to six weeks before their due date, which means the 34th week of their pregnancy. Employees who are adopting a child or are the partner of a person giving birth can commence their leave on the day of the birth or adoption.
How long is parenting leave?
According to The Fair Work Commission, employees can claim Parental Leave Pay for two periods, one set and one flexible.
- Set Parental Leave Pay: A set period of 12 weeks (60 payable days) that has to be used within 12 months of the birth or adoption of a child.
- Flexible Parental Leave Pay: A flexible period of up to 30 payable days that has to be taken within 24 months of the birth or adoption of a child, has to be negotiated with the employer and usually starts after the set Parental Leave Pay period ends.
It’s worth noting that employees who get Parental Leave Pay or who are on paid parental leave funded by their employer, or a combination of both, are still entitled to take some additional unpaid parental leave as well. Permanent full-time or part-time employees are entitled to 12 months of such unpaid parental leave. Some employers even grant a further 12 months after that if requested by the employee.
Who is eligible for paid parenting leave?
To be eligible for Parental Leave Pay payments from the Government, workers must:
- be the birth mother of a newborn child
- be the adoptive parent of a child
- be another person caring for a child under exceptional circumstances such as severe illness or accident
- be the primary carer of the child
- have an income under a certain threshold
- not be working or on leave while receiving the payment
- have worked a certain amount of time in the past 13 months as determined using a work test
- meet Australian residency requirements
The Government usually makes the payments to you as the employer, and you then pay your employee as part of your usual pay cycle. In this way, you can withhold the usual amount of tax and allow for any other payments or contributions that you regularly make (such as super or salary sacrifice). However, your employee can also choose to be paid directly by the Government.
How much is Parental Leave Pay?
Parental Leave Pay gives eligible employees up to 18 weeks of leave paid at the national minimum wage. At the time of this article’s publication, this is $772.55 per week or $154.51 a day pre-tax. Services Australia provides more information on eligibility and how to claim Parental Leave Pay. You may want to refer expecting and new parents among your employees to their website.
Employer-funded parenting leave vs Government-paid parental leave
As an employer, you may also want to offer your staff paid parental leave beyond the Government-funded payment. Employees can obtain both Government-funded and employer-funded parenting leave at the same time. The amount you may wish to pay eligible employees is up to you and depends on your agreements with your staff. This is definitely something worth considering, as an appealing parental payment package funded by your organisation is sure to make you an attractive employer for potential future hires. Related: Sealing the Deal: How to Make Candidates a Job Offer They Can’t Refuse
Partner Pay
The Australian Government also offers up to two weeks of paid leave for partners of those who are having or adopting children. Although this payment is sometimes called ‘Dad Pay’, it can be accessed by carers other than fathers. Like the Australian Government’s Parental Leave Pay, Partner Pay is also paid at the minimum wage. Eligible Partner Pay recipients must typically:
- be a carer responsible for a newborn or newly adopted child
- have earned under $150,000 in the most recent financial year
- not work or take any paid leave during the Partner Pay period
- meet the applicable income, employment and residency tests
More information about Partner Pay is available on the Services Australia website.
Return-to-work guarantee
Under the Sex Discrimination Act, employees who are returning from parental leave must be treated fairly by their employers. This also means that employees who took a period of parental leave have a right to return to the same position they held before their paid parenting leave. If their old role no longer exists, the employee must be given a new position that is as close as possible in salary and responsibilities to the one they held before.
As the purpose of the Parental Leave Pay scheme is to help businesses retain talent and keep parents up to date on their work throughout the duration of their leave, it might be helpful for both employer and employee to stay connected during the period of leave, the same way as would happen with staff being away from the office for extended periods of time due to COVID-19, for example. You may even want to consider going above and beyond your legal obligations as an employer and offering your new parents flexible working arrangements so they can enjoy those precious first weeks and months with their child.
Read more: Visit the Fair Work website for the latest information on Maternity & Parental Leave and Parental Leave Pay in Australia
Remember that this article is a non-binding guide, and you should always check the latest regulations issued by the Federal Government and your state or territory. Once you are familiar with your employees’ and your rights and obligations concerning parenting leave, consider setting up some best practices within your company to support your staff while also looking after your business interests. This will keep your business running smoothly while employees are on parental leave, and it’ll strengthen your employer brand because your staff will feel supported during an important period of change in their lives.
