Parental Leave Changes – What Employers Need to Know

Published July 01, 2020 (last updated November 18, 2020) -
parental leave changes questions

Parental leave entitlements for new and expecting parents are increasing, and Employsure, New Zealand’s largest workplace relations company, is urging business owners to update policies and procedures so that staff are aware of the changes.

Employees with babies due or born from today will be able to take 26 weeks of primary carer leave, an increase of 4 weeks. The parental leave payment amount has also increased from $585.80 to $606.46 gross. The minimum payment rate for self-employed parents increases from $177.00 to $189.00 gross per week, which is equal to 10 hours of the current adult minimum wage.

Those intending to assume permanent primary care of a child under the age of six are also entitled to 26 weeks of primary carer leave.  Employees can apply to the Inland Revenue Department to receive parental leave payments during this time. Once on parental leave, an employee can work up to 64 hours and not lose their payments.

“It is important for employers to be proactive and provide the correct information to employees whenever there are changes,” said Employsure Senior Employment Relations Adviser Ashlea Maley.

“With changes in workplace law occurring frequently, it is crucial to keep on top of any documentation to ensure it refers to the correct amounts of leave and benefits employees are entitled to. There are set timeframes for responses for employers and strict rules about what responses have to say.

“There also have been temporary changes to allow workers to return from leave due to COVID-19 without jeopardising their entitlements. Discriminating against an employee due to family caring requirements or being pregnant is prohibited, however if there is a genuine reason, employers can take disciplinary action or even undertake a restructure process.

“Another thing to factor in is how cover will be arranged while the employee is on parental leave. Fixed term employment is a good option but there are rules to get right, otherwise it can lead to further costs for employers. Where employees are sharing their leave with their partner or wanting to do some work with their employer during the primary carer leave, it can be complex to manage this and ensure that entitlements aren’t being infringed upon.”

Who is Eligible for Primary Carer Leave?

To be eligible for primary carer leave from their employer, an employee must work for that employer for at least an average of 10 hours a week in the six or twelve months immediately before the baby’s estimated due (or the date they assume responsibility for the permanent care of a child under 6 years).

Any of the following candidates may have eligibility for primary carer leave:

  • Employees who have given birth
  • Employees with a partner or spouse who has given birth who are assuming the primary care of the child
  • Employees who have assumed permanent care of a child who is under the age of six

Under all circumstances, those taking primary carer leave must be the permanent primary carer of the child. There is other leave that an employee may be eligible for if they are assuming care of a child but are not the primary carer, such as extended leave or partner’s leave.

It is important to remember that an employee does not have to be a citizen or permanent resident of New Zealand to be eligible for parental leave.

If an employee is due to give birth and qualifies for parental leave payments but does not qualify for primary carer leave, they may place a request with their employer for negotiated carer leave.

Who Pays for Parental Leave?

Employees may be entitled to parental leave payments through the Inland Revenue Department.  The employee is responsible for applying for parental leave payments within the timeframe required. As part of the application, there are sections for the employer to complete.

Unless otherwise agreed, employees are not paid by their employer during parental leave. While employers do not pay the employee during their parental leave, unless they have agreed otherwise, the employee is still considered to be employed.

Employer Advice:

While paid parental leave is a government funded entitlement, employers should have their own parental leave policy tailored to the needs of the business and its employees.

The policy should inform employees who they must notify when applying for paid parental leave, explain the six to twelve-month criteria, and confirm the minimum legal obligations that employers must follow.

Documenting and clarifying the policy in the employee handbook can help avoid misunderstandings, and help employees feel supported.

Importantly, if an employer chooses to offer a separate policy that is over and above the government policy, it must contain:

  • Who can take parental leave
  • When parental leave can be taken
  • Timeframe of leave
  • How well the job is protected during the leave
  • Remuneration during leave
  • Process for application and procedures to follow

“It is up to the employer to work together with their employee to make the transition to paid parental leave a smooth one,” continued Ms Maley.

“They should be looking at all options, including approximate dates for a return to work, as well as what days the employee may want to nominate as their keeping in touch days to help them stay connected.

“Business owners should be careful and not discriminate or take action against employees because of pregnancy or family caring responsibilities. Under certain circumstances, an employee may ask their boss for an early ending or extension to their parental leave. It’s up to both parties to work toward a fair outcome.

“Employers should note that in the lead up to the conclusion of an employee’s parental leave, it is up to that employee to provide at least 21 days’ notice. If an employee chooses to return but requests changes to their working terms, such as reduced hours or a change of location, the employer should fairly consider these and comply with the flexible working request rules. Ensure all requests and responses are in writing and any agreed changes are recorded in writing.”

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