Historically, mothers were granted maternity leave at the end of their pregnancy and for a recovery period after the birth. In more recent times, parental leave has evolved to recognise that both parents benefit from spending time with a new child, whether it is the result of birth or adoption. Parental leave can be taken when an employee or employee’s partner gives birth or adopts a child younger than 16 years of age. Some companies offer paid maternity and/or paternity leave as part of the employment entitlements, but new parents in all Australian states and territories are also able to access a federal government scheme known as Parental Leave Pay (PLP). This article considers both employer and federal parental leave support available to expectant parents.
Employer-Funded Paid Parental Leave
Employers will often include paid parental leave in employment contracts, workplace policies, enterprise or registered agreements. The type of pay entitlement and amount of leave will differ across workplaces.
All employees who intend to adopt a child are entitled to 2 days of unpaid pre-adoption leave to attend the required examinations and interviews. An employer can direct an employee to take an alternative type of leave, such as paid annual leave in this circumstance.
Parental Leave Pay
The primary carer of a newborn infant or newly adopted child is also entitled to up to 18 weeks of federal Parental Leave Pay at the national minimum wage rate. The recipient must meet residency rules and pass an income and work test. One type of person who is eligible for PLP is the birth mother, who has registered or applied for registration of the birth in the state or territory birth registry.
Another person who is eligible is someone who is caring for a child because of exceptional circumstances or an initial primary carer of an adopted child (as long as an authorised party placed the child for the purpose of adoption).
Employees are entitled to PLP in addition to any entitlement from their employer, and it can be taken simultaneously with annual leave, unpaid parental leave or long service leave.
From 1 July 2020, eligible employees can claim two types of PLP, a continuous set period of 12 weeks within a year of the birth or adoption of a child; and another flexible 30-day PLP entitlement. The employee can access the second PLP upon negotiation with their employer in the two years following the birth or adoption, although it is usually taken immediately after the end of the first PLP period.
An employee needs to negotiate with their employer in order to access the second PLP entitlement. The employer might agree that the parent can work reduced hours or days, change their usual work pattern or take additional unpaid leave. For example, a new mother who typically works four days a week might take her initial twelve weeks of PLP following the birth. When she returns to work, she negotiates with her employer to work two days a week and access flexible PLP on the days that she would otherwise work. When the flexible PLP is exhausted after 15 weeks, she will return to her normal four-day workweek.
Eligible fathers and partners, including same-sex partners, can also access two weeks PLP at minimum wage. This Dad and Partner Pay is paid directly to the partner.
Payment Of Parental Leave
Typically, the federal government makes the PLP payments directly to the employer who passes the funds on to the employee. Payslips must be issued and specify that the funds are PLP payments. Employers must keep extensive records relating to government-funded PLP, covering the gross and net payments for each employee and the associated time period, the dates of each payment, the income tax withheld and any deduction from each payment. These payments must be identified as originating from the Australian Government PLP Scheme.
An employee cannot obtain Parental Leave Pay if they do not meet the eligibility criteria. An employee is also ineligible if he or she is a foster carer and the child was not placed in their care with a view to adoption. Someone also cannot receive PLP if they return to work unless it is under permitted circumstances or for “keeping in touch” days. Someone who is not eligible for PLP may still be able to access a Newborn Upfront Payment or Newborn Supplement.
There is a capacity for a birth mother or adoptive parent to transfer their entire entitlement to another person, such as a spouse or primary carer. There is also an allowance for a mother who has a baby who was stillborn to receive either Parental Leave Pay or a Stillborn Baby Payment.
In every state and territory, parents are entitled to take leave from work to bond with a new child. Armstrong Legal can provide assistance if you have any questions about your entitlement to federal Parental Leave Pay or employer-funded parental leave. Please call 1300 038 223 for any assistance with this area of employment law or any other workplace right.