Talking to employees about Paid Parental Leave

On 1 January 2011, the Australian government introduced Australia’s first Paid Parental Leave scheme. This is a major win for Australian families and for Australian employers.

The scheme provides up to 18 weeks of government-funded Parental Leave Pay at the National Minimum Wage (currently $570 per week before tax) for eligible parents of children born or adopted from 1 January 2011. It helps working parents spend more time at home to care for their children in the vital early months following birth or adoption.

The Paid Parental Leave scheme also benefits employers. It helps employers retain valuable skilled staff by encouraging them to stay connected with the
workforce when they become parents. The scheme will help increase workforce participation. 

Staying in touch

It is important for women to remain connected to their workplace when they take time off to have a baby. Australian women have lower labour force participation during child-bearing years than women in other countries.

Almost one-fifth of mothers in paid work resign instead of taking leave around childbirth. This has consequences for both the mothers taking leave, and for the Australian businesses when it comes to retaining skilled staff.

When you consider the time and money employers invest in training and development, and the costs associated with hiring new staff, holding onto skilled staff makes good business sense.

From 1 July 2011, employers will need to provide the government-funded Parental Leave Pay to their eligible employees who have been with them for at least 12 months. Other eligible parents will be paid through the Family Assistance Office, or employers can choose to provide their Parental Leave Pay.

The government has consulted with business organisations and employers to make the arrangements as simple as possible. 

Parents will have to lodge a claim for the payment. If the parent is eligible, Centrelink will get in contact with their employer if they need to be involved.

Employers will receive funds from Centrelink upfront and there’s no need for special accounts, no special pay arrangements and no reporting back to the government. There is also no superannuation payable, and no payroll tax or increase in workers compensation premiums.

As employers only have to provide the government-funded pay when they have an eligible long-term employee, it is estimated that only 9% of all employers, and 3% of small businesses will be involved in the scheme in any year.

Paid Parental Leave is an important addition to workplace entitlements, supporting parents to retain links with the workforce while enabling employers to retain valuable skilled staff.  

For more information about the Paid Parental Leave scheme, including your responsibilities as an employer, and to register for the scheme, go to www.centrelink.gov.au or call the Centrelink Business Hotline on 131 158.

For information about workplace entitlements, the National Employment Standards in the Fair Work Act 2009, discrimination or workplace best practice visit www.fairwork.gov.au or call the Fair Work Infoline on 131 394.

A range of information products developed to assist employers are available on the Centrelink website. Centrelink also provides online help and telephone assistance through the Centrelink Business Hotline.

Jenny Macklin is Minister for Families


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