Paid Parental Leave
December 7, 2010
From 1 January 2011, employees who are the primary carer of a newborn or newly adopted child may be eligible to receive Paid Parental Leave (PPL) of up to 18 weeks, paid at the National Minimum Wage (currently $569.90). The PPL scheme is funded by the Family Assistance Office (FAO), and is designed to complement existing leave entitlements. If your business already has an existing Paid Parental Leave arrangement under an industrial instrument or Agreement, both entitlements will exist and can be taken concurrently or in succession, however other leave entitlements such as annual leave will not accrue while an employee is paid under the PPL scheme.
In order to access the PPL scheme, employees must apply to the FAO who will make a determination on the application based on the eligibility criteria. Where an employee is entitled to PPL, the FAO will notify the employer of their obligations accordingly. Employers will be requested to provide relevant details such as bank account details, pay cycle, and any changes to circumstances during the PPL period.
Employees in receipt of PPL are permitted to participate in the workplace for up to 10 days (of 1 hour or more) for a "keeping in touch" day for meetings, training, or business planning. The keeping in touch day is designed to allow both parties to maintain the employment relationship for meetings, and is to be facilitated by agreement between the employer and employee. There is no requirement for keeping in touch days to be taken, and any keeping in touch days are to be paid by the employer as ordinary time worked, and attract the accrual of other leave entitlements.
Once the employee returns to normal work, outside of a keeping in touch day, the PPL stops. Any remaining balance of PPL entitlement can be transferred to a spouse (or other primary carer) that meets the eligibility requirements, and employers will be notified of their obligations if any.
One of the major points of contention in the legislation has been the payment of PPL. As the legislation stands, the current arrangements are that from 1 January 2011 to 30 June 2011, PPL will be paid directly to employees by the FAO.
From 1 July 2011, employers will be responsible for administering PPL payments to employees in most circumstances; however employers will not be required to make any payments until the PPL funds have been received by the employer from the FAO.
PPL is to be paid to employees as per ordinary pay cycle arrangements. Employers are obligated to provide payslips to employees indicating Gross and Net payments, as PAYG taxation is payable on PPL.
Superannuation Guarantee contributions are not payable on PPL, however employees can elect to salary sacrifice an amount from their PPL as a voluntary superannuation contribution.
Employers are also advised to keep relevant records of payments received from the FAO and distributed to employees for a minimum of seven years to assist in the event of a dispute.
For more information regarding Paid Parental Leave please contact Eloise Bonel.
