Paid parental leave almost a reality

On 12 May 2010, the Paid Parental Leave Bill 2010 (Bill) was introduced in the House of Representatives at Canberra.  The expected date of commencement will be 1 October 2010.

Fundamental criteria:

• the employee must be engaged in work for a total period of at least 10 of the 13 months prior to the leave, with a break no greater than eight weeks.  Further the employee must complete at least 330 hours in the 10 month period of paid work;
  
  
• the employee may earn no more than $150,000 during the previous financial year; and
  
  
• the employee must be either an Australian citizen or a permanent resident.

Some elements:

• a period of leave up to 18 weeks at the national minimum wage (currently $543.78 per week) for full-time, part-time and casual employees;
  
  
• the leave is available for new parents of natural and adoptive children;
  
  
• the start date for the leave cannot be before the child’s birth or placement of adoption, and must be taken in one continuous 18 week period; and
  
  
• should the employee return to work before all the benefit is received, the person’s partner may receive the unused portion of paid leave, provided they also meet the eligibility criteria.

Payment of the entitlement

The Family Assistance Office will advise an employer if they are required to provide the payment to the employee.  The funding for paid parental leave will be made in instalments from the Family Assistance Office to the employer.

It will be the responsibility of the employer to pay the leave, funded by the Family Assistance Office, to the employee.  However, employers will only be required to pay their long-term employees, these being the employees with over 12 months service prior to the day of leave requested.  Further, the employer is under no obligation to pay the leave to an employee if the employer has not received sufficient funding from the Family Assistance Office.

Compliance with the Act

The Bill gives power to the Fair Work Ombudsman to investigate breaches and commence proceedings where applicable with potential penalties from $3,300 to $33,000 per offence.

Next steps

The Bill was read for the first time in the House of Representatives on 12 May 2010.  The Bill has now been referred to the Senate Community Affairs Legislation Committee with a report due on 3 June 2010.  With the Federal Opposition proposing parental leave in excess of 18 months, it is likely that the Bill will receive assent at least for the 18 weeks proposed.

Employers should prepare for this Bill by:

• ensuring that employee records are up to date, including time in employment and leave taken to date, to accurately determine the eligibility of an employee for paid parental leave; and
  
  
• reviewing the interaction of current parental leave policies with the entitlements of this Bill and consider any new policies that might be now appropriate.
  
  

If you have any questions about the Bill or its prospective application, please contact Ian Curlewis, Partner, on (08) 9288 6756 or ian.curlewis@lavanlegal.com.au or Michael Jensen, Senior Associate, on (08) 9288 6944 or michael.jensen@lavanlegal.com.au