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Paid Parental Leave

Employers have been feeling the pressure of the constant changes to employee entitlements over recent times. We now clear away the mist and leave you with the simple facts surrounding the Government Paid Parental Leave Scheme.

WHO IS ELIGIBLE?

To be eligible for the Scheme, a parent must:

1. Be the primary carer of a newborn child or newly adopted child.

2. Be an Australian resident.

3. Have a taxable income of $150,000 or less in the previous financial year.

4. Have worked for at least 10 of the 13 months prior to the birth or adoption (with any employer).

5. Have worked at least 330 hours over that period (this amounts to just over one day per week – please note this is a correction from the original blog email), with no more than an eight week gap between any two days.

6. Be on leave or not working from the time he or she becomes the child’s primary carer.

7. Register with the Family Assistance Office.

WHAT DO I, AS AN EMPLOYER, NEED TO DO?

Between 1 January 2011 and 30 June 2011, you can voluntarily become involved in the Scheme by making payments to eligible parents during the normal course of your Payroll, OR, leave the employee to deal directly with the Family Assistance Office to receive their payments.

From 1 July 2011, you will be required to distribute Government Paid Parental Leave payments to eligible employees in the normal pay cycle, including withholding tax and issuing payslips, IF those employees:

1. Have worked in your business for 12 months or more.

2. Are expecting to receive at least eight weeks’ paid parental leave.

If the employee does not fulfill the above criteria, but still qualifies for the Scheme, the Government will make the required payments and you are not obliged to pay.

The entitlement to Paid Parental Leave is in addition to the entitlement to Parental Leave under the National Employment Standards and an employee’s contractual and award entitlements.

Parents are allowed to return to work for up to 10 days during the period of the paid leave to allow them to ‘keep in touch’ without losing their entitlement.

HOW CAN I, AS AN EMPLOYER, GET READY?

Before 1 July 2011, you should register with Centrelink’s Online Business Services portal or through the Centrelink Business Hotline (13 11 58) to set up receipt of payments from the Family Assistance Office.

You should also review your policies and entitlements for all employees, to ensure that the necessary requirements are being met.

Case Study:

Best Retailer Pty Limited employs Sam Salesman.

Sam’s partner, is due to have a child in July 2011. His partner works but does not meet the criteria for Paid Parental Leave. As Sam does meet the criteria, the couple have decided he will be the primary carer.

Sam has requested six months leave and has also applied for Paid Parental Leave from the Family Assistance Office.

Best Retailer have registered online with the Family Assistance Office and anticipate Sam becoming a proud father. Once Sam commences his leave, the Family Assistance Office will transfer funds into Best Retailer’s business account each fortnight. Their payroll office can then provide Sam with his pay (less tax) together with the payslip.

For further information, please contact the Workplace Law Team.