Help your clients understand their role in the new Paid Parental Leave Scheme

Workforce Guardian

With the clock ticking, here are our 5 top tips to help your clients implement the Paid Parental Leave scheme in their business.

Australia's first national Paid Parental Leave scheme, funded by the Commonwealth Government, came into effect on 1 January 2011.  The scheme provides 18 weeks' pay for the primary carer of a newly born or adopted child at the federal minimum wage of $570 a week before tax.  All employers will be responsible for administering Paid Parental Leave for their eligible employees from 1 July 2011.    

Even though the new Paid Parental Leave scheme has been big news for months now, many employers, especially small business owners and managers are still confused about their responsibilities.

Check with your clients that they understand their role in the Paid Parental Leave scheme and if they haven't done so already, remind them that they have until the end of June to register their business for the scheme through Centrelink Business Online Services.

They will also have to make any necessary adjustments to their payroll system as well as developing and implementing appropriate policies in their business so they can fulfil their employer obligations and provide parental leave pay from 1 July 2011.

If your clients have yet to fully prepare for the Paid Parental Leave scheme, there are a number of things they really need to do now:

1. It's not too late - take the time now to understand their obligations. There's a wealth of information for employers at the Family Assistance Office website.
2. Work out employee eligibility. There are strict minimum work period requirements and an employee's income cannot exceed $150,000 a year.
3. Provide necessary details to the Family Assistance Office. Employers need to register through Centrelink's Business Online Services portal.
4. Work out how they will keep appropriate records. Businesses must keep records of the funds they receive from the Commonwealth Government and their subsequent distribution to employees.
5. Communicate with employees. The Paid Parental Leave scheme does not provide a right to additional leave. Leave entitlements are set out in the National Employment Standards (NES) and have not changed. However, this area is causing a  great deal of confusion as the eligibility rules specified in the new paid parental leave scheme are more generous than the existing parental leave entitlements set out in the NES. What this means is that in some instances an employee may be entitled to a parental leave payment but not entitled to take the leave. Therefore it's vital that businesses develop and implement a Paid Parental Leave Scheme policy for their business, clearly documenting their obligations as an employer. Once it's set down in black and white, the policy needs to be formally articulated to staff during induction training and other important HR meetings.

Remember, both the employee and the employer need to register with the Family Assistance Office prior to the leave being taken and provide full details of their circumstances. And the employee is responsible for choosing between Paid Parental Leave and the Baby Bonus - they can't have both.  And they must provide proof of the birth to the Family Assistance Office at their earliest opportunity.

While most employers would agree that it's important to retain a connection with an employee during a parental leave period, most would also be at pains to point out that placing the burden of administering the scheme on to them is not a positive outcome.  Although the scheme is 100% funded by the Government, employers won't be reimbursed for their time and expenses in setting up the system and managing it in your business. 

Expert Help

If your clients are at all uncertain about the Paid Parental Leave Scheme, then clearly they will need expert help.

In the same way that a business turns to their accountant rather than the Australian Tax Office for help with business advice and tax minimisation strategies, those same businesses need to turn to an expert service for help with HR and employment relations issues - and not go alone with the Fair Work Ombudsman.

As specialists in the Fair Work Act, Workforce Guardian provides small and medium-sized businesses with assurance that their everyday employment relations' decisions are both legal and compliant. Simplifying HR in business 24x7, Workforce Guardian provides a comprehensive range of practical HR tools including dynamically generated employment agreements, online employment files, HR processes, policies and documents.

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Disclaimer

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. Workforce Guardian Pty Ltd (www.workforceguardian.com.au) is not responsible for the results of any actions taken on the basis of information in this article, nor for any error or omission in this article.