Employer Obligations and the Paid Parental Leave Scheme
Since 1 January 2010, parental leave and related entitlements have formed part of the National Employment Standards (‘NES’), which establishes the minimum entitlements to unpaid parental leave for all employees in Australia (with at least 12 months continuous employment with the same employer). In addition to the NES, employees may also have an entitlement to paid parental leave.
The government-funded Paid Parental Leave Scheme was introduced on 1 January 2011, by way of the Paid Parental Leave Act 2010 (the Act), with the child’s primary carer able to receive up to 18 weeks of Parental Leave Pay (PLP) at the national minimum wage of (currently) $606.50 per week before tax. The weekly payment does not vary dependent upon pre-leave salary, with all eligible employees receiving the same amount.
From 1 January 2013, fathers or partners can also receive up to two weeks of Dad and Partner Pay (DPP). This includes adopting parents and same-sex couples.
PLP applies to permanent full-time, part-time or casual employees, but does not apply to independent contractors. Eligibility for PLP is assessed by the Department of Human Services upon lodgment of an employee claim and not by the employer.
As an employer, your business will likely be required to provide PLP directly to the employee, following payment to you by the Department of Human Services. This requirement clearly increases the administrative obligation on the employer, with various mandatory record-keeping and other financial reporting requirements. The employer must also comply with the Keeping in Touch(KIT) provision within the Act to assist the employee with their transition back to the work place; all KIT activities are defined as paid work, so the employer must pay the employee accordingly.
Significant financial penalties apply if an employer fails to meet its obligations under the PLP requirements, so to ensure you understand your role in the scheme, or to discuss any aspect of business or personal law, contact Julia Adlem or Alisha Thompson at Pace Lawyers on (08) 8410 9494.