A simple guide to parental leave in Australia

Navigating the complex terrain of parental leave can be daunting, particularly for smaller businesses that may not have a dedicated human resources team.

According to Bianca Mazzarella, Senior Associate at McDonald Murholme, “when it comes to parental leave it is important to strike that balance between complying with the legal requirements while also meeting the needs of your employees, and your business.”

What is parental leave?

Parental leave allows employees to take time away from work when:

  • an employee gives birth or adopts a child under 16 years of age; or
  • an employee’s spouse or de facto partner gives birth.

Through the Fair Work Act 2009 and the National Employment Standards (NES), eligible employees can access up to 12 months of parental leave and can also request an additional 12 months of leave, at the discretion of their employer.

What are my legal obligations when it comes to parental leave?

Parental leave encompasses a number of entitlements with different requirements:
 

Government-funded Parental Leave Pay:

The government-funded scheme provides employees with pay at the National Minimum Wage for a maximum of 18 weeks. They must receive an adjusted taxable income of $150,000 or less to be eligible. Employees either receive the government-funded pay directly from Centrelink or passed on to them via their employer.

Employers must provide this payment to employees who:

  • have worked for their employer for at least 12 months prior to the date or expected date of birth / adoption;
  • will continue as an employee during their Parental Leave Pay;
  • are based in Australia; and
  • are expected to receive eight weeks or more of Parental Leave Pay.

Paid parental leave funded by the employer

These days many organisations also offer paid parental leave to their employees through a contract, internal policy or enterprise agreement.

The right to return to work

Employees also have a return-to-work guarantee that means they must return to the same position they held prior to their parental leave. If the role no longer exists, employees must be placed in a position that is of equal stature and salary to their original position.

“Most claims are a result of a breakdown in communication so it is important that all parties are clear about their needs and expectations throughout the process,” Mazzarella added.

Dad and Partner Pay

This entitles working fathers / partners to receive up to two weeks of government-funded pay at the National Minimum Wage.

How can I become a best practice employer?

Employers should strive to go beyond their legal obligations and embed parental leave policies that are family-friendly and flexible.  They may include:

  • extended periods of paid leave;
  • continuation of an employees’ superannuation payments;
  • offering a return-to-work bonus;
  • options of taking paid leave at half pay or accessing other leave entitlements; and
  • ‘topping up’ the Government-funded Parental Leave Pay.

Mazzarella emphasised the importance of “touching base with staff while they are on maternity leave, particularly regarding changes to the organisation.” This may include forwarding on emails, invitations to planning events and return-to-work meetings.

Embedding a best practice policy has positive outcomes for a business’ bottom line and the productivity of its staff, often translating to less staff turnover and reduced training costs.

It also “creates an easier transition for employers returning to work and a strong sense of satisfaction and loyalty,” Bianca concluded.

Visit www.fairwork.gov.au for further information.