Attracting and retaining valued employees is critical to a company’s long-term business success. However, Australian employers are experiencing increased competition to find and retain skilled and loyal employees.
When accepting or continuing a role, employees may consider the benefits offered by an employer, including parental leave.
What are the current entitlements to parental leave in Australia?
Unpaid Parental Leave
Under the Fair Work Act 2009, employees who have completed a minimum of 12 months continuous service with their employer are entitled to 12 months of unpaid parental leave, with the option to request a further 12 months.
Both parents are entitled to 12 months unpaid leave, regardless of whether they are the primary or secondary carer. Unpaid parental leave may be taken by both parents at the same time for a maximum of 8 weeks.
Employees may take 6 weeks of their unpaid leave as ‘flexible’ leave at any time within 24 months of the child’s birth or adoption, meaning the leave can be taken for periods of 1 or more days at a time.
Government Parental Leave Pay
In addition to unpaid leave, employees who meet the ‘work test’ and the ‘income test’ are eligible for Australian Government Parental Leave Pay (Government Parental Leave Pay).
Government Parental Leave Pay entitles the primary carer of a newborn or a newly adopted child to 18 weeks of paid leave, calculated at the National Minimum Wage. To be eligible, the primary carer must earn an annual income of $156,647 or less.
The secondary carer of a newborn is entitled to the Government ‘Dad and Partner Pay’, which is two weeks paid leave at the National Minimum wage.
To be eligible, the secondary carer must:
- Care for the child on each day of the period of Dad and Partner Pay;
- Earn $151,350 per annum or less;
- Have been working in paid employment for 10 of the 13 months before the start date of the Dad and Partner Pay; and
- Not be on paid leave for the period of the Dad and Partner Pay.
What else can an employer provide?
In order to attract and retain employees, employers may offer additional benefits, such as:
- A ‘top up’ to the Government Parental Leave Pay, so the employee continues to receive their regular wage whilst on parental leave;
- Parental leave payments at the employee’s normal wage for a set period (commonly between 7 to 12 weeks) in addition to the Government Parental Leave Pay;
- Paid parental leave to all parents, not only the primary carer. This is a key driver for more fathers taking parental leave and providing support to families and to women when they return to work;
- No set eligibility criteria, so an employee is entitled to the employer’s paid parental leave immediately upon starting in the role.
In order to stay competitive in the market, employers are getting creative with the benefits they offer employees, including parental leave policies.
If you would like advice regarding your policies, including your parental leave policy, please contact our employment law team.