Paid maternity leave just around the corner…are you confused?
It’s time to make sure you understand and are prepared for the introduction of the paid parental leave scheme.
It strikes me that there is a degree of confusion in the business community about a fundamental series of changes that will come into force from 1 January 2011. In the main, those changes relate to the introduction of the Government’s Paid Parental Scheme.
This confusion has been evident in a series of workshops that I have been running around understanding the impacts of legislation on employers and hiring managers.
As many of you will know, the scheme was introduced as part of an election policy plank by the incumbent Government that allows individual employees to access up to 18 weeks of paid parental leave via a specific program administered by Centrelink and the Family Assistance office. However, you also need to be aware of the alignment between this initiative and the National Employment Standards administered by Fair Work Australia. You should read this no matter the size of your organisation and also seek independent third party legal advice where required. You should read this and seek more information if you are a hiring manager or recruiter.
It is important that you know what you are doing and how, the implications of bringing on contractors for the period while someone may be on maternity leave and how that process should also be handled.
The Australian Governments Paid Parental Leave Scheme and being prepared.
First things first, the Australian Government’s Paid Parental Scheme comes into force, essentially, from 1 January 2011. That is, the scheme applies to those working parents where a child has been born or adopted on or after that date.
The working parent must be an Australian resident to qualify for the Government funded program.
In order for an employee to be eligible, they must have worked for a period of 10 of the previous 13 months ahead of the birth (or adoption) of a child.
While the payments from the Australian Government are to the individual, the rights to parental leave fall under the National Employment Standards in the Fair Work Act. That means, the parent is eligible for up to 12 months unpaid parental leave with the ability to request a further extension.
Other provisions could potentially apply if your employee is covered by a specific modern or industry award.
An eligible employee must be earning under $150,000 per annum to qualify.
An employee can initially choose how they are paid.
Prior to 1 July 2011, an employee can choose to be paid directly through the employer or specifically as an individual with direct payments. That means, for employees taking maternity leave, it is quite possible that you will have to engage directly with Centrelink by way of re-imbursement of the 18 week scheme. Put simply, you would continue to pay the employee, however, you would then have to recover those funds from Centrelink.
It is fundamentally important that whatever HR and Payroll system you run, that the period of paid versus unpaid is administered correctly. By not having systems and processes set up correctly, you could run into a problem of either underpaying or overpaying. If you are directly paying an employee the entitlement and then recovering it from Centrelink, you need to ensure you have been registered. More information on how to register can be found HERE. It is still up to the employee to make the claim for entitlement, but if registered and should you be paying directly, Centrelink will make contact with you.
If at any time during the 18 week paid parental period, the employee returns to work, the payments cease.
Replacing an employee on maternity leave with a contractor for the period.
This is a pitfall for those who do not have internal HR Services in place, or who outsource the process. You need to ensure that you are abiding by the National Employment Standards as determined by the introduction of the Fair Work Act 2009. These standards state that there is a period whereby an individual may apply for unpaid maternity leave in addition to the provision for an extension by a further 12 months.
The confusion may come in how you bring someone on to replace them for a certain period of time – because don’t forget, the position itself needs to remain open for the period as determined under law. This is where the situation can get a little tricky.
First of all, you need to ensure that anyone coming on board under contract does so under a non-ongoing contract arrangement and, that from the beginning, you make it clear to them that the period of the contract is exactly that – for the period of leave the incumbent is on.
Contract selection is important because if you choose the wrong one, you could find that after a period of nine months, the contractor could technically be determined as a full time employee entitled to the same terms and conditions as a permanent member of staff.
Also, you need to ensure that you work out with your employee on maternity leave if they are in fact wanting to return to work, or if they will seek an extension of time. This is important for your own business planning and workforce planning process. Setting and establishing “flags” around key dates for review is important.
There may also be some difference when it comes to your specific organisation and whether or not you have award or industry agreements that require a specific or different process to be implemented.
Important links
- Find out more about Parental Leave Scheme eligibility HERE
- How to provide parental pay from 1/1/2011 through to 30/6/2011 HERE
- Know more about the National Employment Standards HERE
- Apply for CentreLink Online Business Services HERE
- Paid Parental Leave Employer Tool Kit HERE
If you have any questions please let me know, I am more than happy to answer questions or put you in the right direction – the key is to get things right from the beginning to save cleaning up problems later. Paid parental leave is a fantastic policy – if it works the way it is intended. It only works when people know HOW it works!
