Australia's first national Paid Parental Leave scheme started on 1 January 2011. It's a new entitlement for working parents funded by the Government. Legislation for the scheme came into force in July 2010. This article answers employers frequently asked questions.
Q: What is the Paid Parental Leave scheme?
The Paid Parental Leave scheme provides Parental Leave Pay, which:
- is funded by the Australian Government
- is, in most cases, for mothers who have been working before the birth or adoption of their child
- can be transferred to the other parent
- is paid at the National Minimum Wage - currently $570 a week before tax
- lasts up to 18 weeks
- can be taken any time in the first year after birth
- is also available to adoptive parents
Q: What are the benefits of a Government-funded Paid Parental Leave scheme?
The Paid Parental Leave scheme is designed to give more parents financial support to spend time at home with a new baby, help them maintain their connection with their job and help employers retain valuable and skilled staff.
The scheme is designed to boost participation and productivity and, at the same time, support parents to balance work and family responsibilities.
Parental Leave Pay is funded by the Australian Government. Eligible employees may receive Parental Leave Pay before, after, or at the same time as employer-provided paid leave such as recreational or annual leave and employer-provided paid and unpaid parental leave.
The Paid Parental Leave scheme is designed to help employers enhance the family friendly workplace conditions many already offer.
Q: Will I have to fund Parental Leave Pay for my employees?
No. Parental Leave Pay will be funded by the Australian Government.
Q: What will be the role of employers?
Once the scheme is fully implemented, you will be required to provide the Government-funded Parental Leave Pay to your long-term employees. This role is being phased in over the first six months from 1 January 2011 to help you transition to the new arrangements and align with the start of the financial year.
For children born or adopted from 1 July 2011, you will be required to provide Parental Leave Pay to your eligible long-term employees - people who you have employed for 12 months or more prior to the expected date of birth. However, you can choose to provide Parental Leave Pay to your employees from the beginning of the scheme for children born or adopted from 1 January to 30 June 2011.
Receiving Government-funded Parental Leave Pay from their employers will assist women to maintain their attachment to the workplace. This means employers can retain skilled and valuable staff.
Q: When will my role commence?
The role of employers in the scheme is being phased in. From 1 July 2011 you will generally be required to provide Parental Leave Pay to your eligible employees who have worked with you for at least 12 months prior to the birth or adoption. If you are not required to provide Parental Leave Pay to an eligible employee, you can still choose to do so.
You can prepare for the scheme, by registering for Centrelink Business Online Services at any time. Once registered, you can opt in to provide Parental Leave Pay to eligible employees if you wish.
Q: Will I have to work out if my employee is eligible?
No. You do not have to work out if your employee is eligible. This will be done by the Family Assistance Office. Centrelink will contact you if you are required to provide Parental Leave Pay to your employee.
Q: Will I be required to provide Parental Leave Pay to all employees?
No. You will only be required to provide Parental Leave Pay to your eligible employees who have a baby or adopt a child from 1 July 2011 and who:
- will have been your employee for 12 months or more prior to the expected date of the birth or adoption; and
- will be one of your employees for the Paid Parental Leave period; and
- is an Australian-based employee, and
- is expected to receive eight weeks or more of Parental Leave Pay
You will not be required to provide Parental Leave Pay to employees who are expected to receive less than eight weeks of Parental Leave Pay, for example, where a father may be taking the unused portion (of less than eight weeks) of a mother's unused Parental Leave Pay.
Centrelink will contact you if you are required to provide Parental Leave Pay to one of your employees. Other employees will receive their Parental Leave Pay from the Family Assistance Office.
There are benefits to employers in providing Parental Leave Pay. You can choose to provide Parental Leave Pay to any or all your eligible employees for children born or adopted before 1 July 2011. For children born or adopted from 1 July 2011, you can choose to provide Parental Leave Pay to eligible employees with less than 12 months service or who are to receive less than eight weeks of pay should you and your employee agree to this arrangement.
Decisions about your role in providing Parental Leave Pay to eligible employees who have or adopted a child from 1 July 2011 can be made from as early as 1 April 2011 when these employees can start lodging claims.
Q: How will I get the funds to pay my employees?
Centrelink will ensure that you have the required funds before you need to provide Parental Leave Pay to your employee. You can choose to be funded fortnightly or in three six-weekly instalments.
Q: Will I have to alter all my employee's pay cycles to adjust to the Paid Parental Leave scheme?
No. You do not have to change your employee's usual pay cycle, set-up any special bank accounts or report back to Centrelink.
You just have to provide the Parental Leave Pay to your employee with the usual PAYG tax deducted.
Q: Will my employee be able to continue to work while receiving Parental Leave Pay?
No. Employees can not work while receiving Parental Leave Pay, but may engage with the workplace under the scheme's Keeping in Touch provisions.