Paid parental leave (PPL) is an initiative by the government that provides eligible mothers and other primary carers funds to compensate for the drop in income for when they take time off to care for their child. So some employees may be entitled to government-funded paid parental leave in New Zealand while they are not at work, and are caring for a new child.
No, employers are not required to offer employees a contractual entitlement to parental leave or parental leave payments. Although, Inland Revenue may pay them in addition to anything they may receive from you, and similarly if they are ineligible to receive paid parental leave from you they may still receive some payments from the government.
For an employee of yours to be eligible to receive parental leave payments, they must have been employed for an average of 10 hours per week over any 26 of the 52 weeks immediately before their baby’s due date or the date they become the primary carer of a child under six years of age. This parental leave payment is provided to employees by the government, so they will not need to be employees of yours during the period in which they are receiving these payments.
Parental leave is paid for one continuous period of up to 22 weeks (this was increased from 18 weeks as of 1 July 2018). While parental leave can be transferred between partners or spouses, whether it is transferred or not, the parental leave payment must be made during one continuous period.
Regardless of the eligibility criteria, to receive any parental leave payment your employees will need to fill in an application form and provide it to Inland Revenue. Encourage your employees to apply as soon as possible, as it can take Inland Revenue some time to process the application. As an employer, if you are the sole employer being used by your employee for parental leave payment eligibility you may be asked to confirm their employment and income details before signing the application form. You are also required to give your employees information about parental leave payments they may be eligible to receive.
Annual holidays can be used prior to the arrival of a child, and can also overlap the payments of parental leave. Employees wishing to take both at the same time, or stagger the leave, should discuss this with you, as well as Inland Revenue, and work out the best solution to ensure they are ready for the child, and not the subject of secondary tax.
For further advice call Employsure, day or night, on 0800 675 700.