Paid Parental Leave now locked in
Over the next 12 months, Australian employers will face further changes to the minimum safety net of employment entitlements. The Paid Parental Leave Bill 2010 (Cth) received Royal Assent on 14 July 2010, and introduces a national Paid Parental Leave Scheme, which is scheduled to commence on 1 January 2011.
For the first half of 2011, a six-month grace period will apply. In that period employers will be able to “opt-in” to administer parental leave payments, should they choose to do so.
From 1 July 2011, all employers will be obliged to administer the Scheme for their eligible employees.
Overview of the Paid Parental Leave Scheme
The main features of the Scheme are as follows:
- Subject to qualifying criteria, full-time, part-time and casual employees will be eligible for parental leave payments.
- Paid parental leave will be a government funded “entitlement” calculated at the Federal minimum wage rate, adjusted annually. This rate is currently $569.90 per week for a full time employee.
- Parental leave payments will be payable for up to a maximum of 18 weeks to the primary carer, which may be a combination of maternity and paternity leave.
- Parental leave payments are payable in only the first year after the birth of a child or, in the case of adoption, on placement of a child.
- Superannuation contributions will not be included, and employers will not be obliged to pay contributions during the paid parental leave period. However, this arrangement will be reviewed after two years.
- Eligibility for parental leave payments will be determined solely by the Family Assistance Office.
- Employers will only be responsible for administering parental leave payments for their employees who, broadly, satisfy the following criteria:
- Those who are an Australian citizen or permanent resident that live, and will continue to live during the paid parental leave period, in Australia (extending to some New Zealand citizens who hold special category visas).
- Those who earn less than $150,000 gross per annum and have not already received a “baby bonus” for the child for whom the entitlement is claimed.
- Those who have, or will have, been employed continuously by their employer for at least 12 months immediately before the expected or actual date of birth of the child. - Shorter-term employees may be eligible to receive parental leave payments directly from the Family Assistance Office, provided they have worked at least 10 months over the previous 13 month period.
· Implementing the Scheme
· Employers should now review their existing paid parental leave arrangements, if any, and consider the changes necessary to appropriately implement the Scheme.
(Source: Hopgood Ganim)
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