Extra Parental Leave Anyone? (Part 2)

Posted on 04 October 2011

There have been very significant changes to the Parental Leave provisions in our workplace laws over the last few years. Further the emergence of new Paid Parental Leave (PPL) scheme has significant impacts upon employers and employees alike. We detail many of the important changes in Part 2 of our 'Extra Parental Leave Anyone?' blog below.

5. What if Special Maternity Leave is applicable? How does that affect leave entitlements?

Employees that are eligible for parental leave and are experiencing pregnancy related illness and therefore rendered unfit to perform their normal responsibilities and duties are entitled to unpaid special maternity leave. Such employees are required to give their employees adequate notice and a medical certificate before special leave is granted. Special maternity leave taken before birth reduces the employee’s unpaid parental leave entitlements.

6. What about the Paid Parental Leave scheme?

On 1 January 2011 Australia’s new Paid Parental Leave scheme came into effect. This means that eligible Australian working parents can now receive up to a maximum of 18 weeks of Paid Parental Leave (PPL) at the national minimum wage rate from the Government, administered by their employer.

7. What about pre-existing parental leave benefits under employment contracts or agreements?

It is important to reiterate, for both employers and employees alike, that PPL is paid in addition to any other paid parental leave entitlements under the employee’s respective employment agreement or award. As such, eligible employees are entitled to receive their normal entitlements along with PPL entitlement. Employers should take the opportunity now to update their existing agreements and ensure that any paid parental leave entitlements that are provided by the employer voluntarily complement the government’s Paid Parental Leave scheme.

8. Administering Paid Parental Leave

Paid parental leave is funded by the federal government via Centrelink, however, it must be administered by the employer. The employer must register with the Family Assistance Office who will determine if the employee is eligible and if so if the employer must administer the payments. If the Family Assistance Office determines that the employer must administer the payment then the employer must register with Centrelink for the scheme and will then receive the payments from Centrelink which must be passed on to the employee in their usual pay cycle.

The employer needs to ensure the parental leave pay is paid in the same way as the employee’s wages. That is, the employer must withhold tax, provide the employee a payslip and keep records of the funds received from Centrelink and paid to the employee. However, the employer does not have to pay contributions to the employee’s superannuation fund or payroll tax for paid parental leave. The employer also has an obligation to notify Centrelink of any changes for example the employee returning to work.

9. What are ‘keeping in touch’ days?

Under the new scheme employees and employers can take advantage of ten (10) paid voluntary ‘keeping in touch’ days in order to foster a smooth transition for new parents returning back to work. This incentive allows employees to maintain their professional skills and relationships.

The days do not need to be used all at once and you must be paid your usual wages or salary in addition to your Parental Leave Pay for the time you attend work. Keeping in Touch days do not extend your Paid Parental Leave period.

It is important to note that this benefit is not reflected in the Fair Work Act and accessing it may affect an employee’s unpaid parental leave benefit which must be taken in a continuous period. The Fair Work Act may shortly be amended to allow for “keeping in touch” days with no effect on the unpaid leave entitlements.

It is also important to note that any employee that exceeds the maximum 10 days will lose their entire paid parental leave benefit. This is why it is imperative for employers and employees to plan how the strict 10 days will be taken..

10. What do I need to do now?

Both employers and employees should take advantage of the emergence of the new scheme to review their respective leave policies, entitlements and obligations under employment agreements and ensure they comply with the National Employment Standards and make provision for the application of the Paid Parental Leave Scheme.

If you require any further assistance in relation to how the National Employment Standards and new PPL scheme affects your employment or your business, please do not hesitate to contact us so that we may assist you find a solution.