Alert

Who does this affect?

All Australian employers.

What do you need to do?

Ensure you are aware of recent developments.

Author
Kathleen Kelly  
Solicitor

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Andrew Gray  
Partner
T +61 2 9296 2404

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Murray Kellock  
Partner
T +61 3 9643 4172

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Perth
Robert Lilburne  

Canberra
Ian Johnson  

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The Government has now released further details of its paid parental leave scheme which will commence on 1 January 2011.

The scheme will provide eligible primary carers of newborn or adopted children with up to 18 weeks’ paid leave, paid at the adult minimum wage (currently $543.78 per week). Primary carers will be eligible for paid leave if they:

• earned less than $150,000 in the previous financial year;

• worked at least 330 hours over the previous 10 months; and

• worked continuously with one or more employers for at least 10 of the previous 13 months.

Eligible part-time employees will receive the full weekly rate of pay, not a pro rata amount. Paid parental leave will also be available to contractors, casuals and self employed workers.

Secondary carers will not be eligible for paid parental leave. However, if the primary carer returns to work before they have received their full paid parental leave entitlement, the entitlement may be transferred to another carer in some circumstances.

The paid leave will be funded by the Government, but delivered through employers. The Government will pay the employer upfront, and the employer will then make the leave payments to the employee. Parents will also continue to be eligible to receive paid parental leave from their employer. The Government funded leave can be taken in conjunction with, or in addition to, paid leave provided by their employer.

Employers will not be required to make superannuation contributions on the Government funded leave payments. Further, the Government intends to “clarify” that employers who provide paid parental leave on a voluntary basis will not be required to make superannuation contributions in respect of those payments.

The scheme will be subject to a comprehensive review in 2013. This review will consider introducing a paid leave entitlement for secondary carers, and requiring employers to make superannuation contributions on parental leave payments.

We will keep you informed of further developments in this area.