The Australian Federal Government has legislated to provide paid parental leave. This legislation becomes operative from 1 January 2010. The paid parental leave will be provided to eligible employees on the birth or adoption of a child.
The Parental Leave will be government funded, however employers are required to provide the critical role of administering the scheme. Whilst the legislation becomes operative on 1 January 2010, there is a six month transitional period from that date until 31 June 2011 providing employers with the opportunity to become familiar with the scheme and its obligations.
Employers will only be required to administer the scheme for long term employees. Long term employees are employees who have been with the organisation for 12 months or more prior to the expected birth of the child and include casuals. Employees who are not considered long term will have the scheme administered by the Family Assistance Office.
Administration of the scheme involves making the parental leave payments to the employee on behalf of Family Assistance Office, withholding the appropriate amount of taxation and notifying the Family Assistance Office of certain circumstances and events.
A summary of the scheme is as follows:
· Paid parental leave will be provided to mothers and adoptive parents who have been working and who have a baby or adopt a child on or after 1 January 2011;
· the paid parental leave will be for up to 18 weeks
· will be paid at the rate of the National Minimum Wage (currently $543.78 per week gross);
· will be treated as taxable income
· must be taken in one continuous period; and
· the employee can nominate when in their period of leave they receive the paid parental leave.
To be eligible employees must meet the work test, income test and residency requirements.
The Paid Parental Leave does not vary employees leave provisions in the Fair Work Act 2009 and employees will still be entitled to the leave provisions within the National Employment Standards; contract or enterprise agreement.
Employees may not work whilst on Paid Parental Leave but may use the “keeping in touch” provisions. If an employee returns to work, before they have received all of their 18 weeks of paid parental leave, the person’s partner may be able to receive the unused amount of paid parental leave.
Business SA is providing seminars to educate employers about their role and obligations. The seminars will be conducted on 2 December 2010, 10 February 2011 and 24 March 2011. For more information, visit www.business-sa.com or call 08 8300 0103.