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Employers’ obligations for paid parental leave.

28/02/2011

An Australian resident who earns less than AUD150,000 per annum, who is the “primary care-giver” of a child born or adopted on or after 1 January 2011  and who has worked at least 330 hours during ten of the preceding 13 months can apply for generous financial support funded by the Australian government.    The support is pegged at the national minimum wage rate (AUD569.90 gross as at 1 July 2010) for up to 18 weeks.  That works out to a total of around A$10,260.  Employees will not receive the social security payments if they work more than ten days during that period.

Payments under the Scheme are in addition to – not in place of  – other legal obligations for employers to provide paid parental leave.  From 1 July 2011,  employers will also be obliged to register the business with a “Family Assistance Office”, administer the scheme and distribute payments to employees.   The FAO will fund the payments and the employer will then be required to remit them to the employee on each regular monthly or fortnightly pay cycle.    Employers not required to make superannuation contributions worked out on the parental leave payments, but must withhold PAYG tax from each payment.

The scheme  is gender-neutral and is equally available to both parents.   A father who wishes to stay home with the new-born child must rely on accrued annual or other forms of leave, but he can claim the payments.  The mother must rely on sick leave for the delivery and annual leave entitlements in order to breastfeed.

Employers may wish to review current arrangements for paid parental leave.   Changes to industrial agreements or employment contracts must be re-negotiated.  Employers must take their obligations seriously as breaches attract a maximum penalties up to AUD33,000 for corporations.

 

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