Paid Parental Leave changes will be here 1 July

When the Senate passed the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 earlier this month, it was the first meaningful change to PPL legislation since it was introduced in 2011. 

For parents whose children are born or adopted from 1 July 2023, the requirement that 18 of the 20-week paid parental leave entitlement be taken by the ‘primary carer’ will be removed. The new legislation will allow single parents to use the full 20-week entitlement of paid leave, up from 18 weeks currently.

Under the new scheme, PPL will be extended from 20 to 26 weeks by 2026, with an extra fortnight of paid leave added each year from July 2024 until 2026.

Eligibility for parental leave in Australia

To be eligible for parental leave in Australia, an employee must have worked for the same employer for at least 12 months before the birth or adoption of their child. They must also have worked at least 1,200 hours during the 12 months before the expected date of birth or adoption.

Types of parental leave in Australia

There are two types of parental leave in Australia: unpaid parental leave and government-funded parental leave.

Unpaid parental leave: This type of leave allows eligible employees to take up to 12 months off work to care for their newborn or newly adopted child. During this time, their job is protected, and they are entitled to return to the same or a similar position when they return to work.

Government-funded parental leave: This type of leave provides eligible employees with financial assistance during their time off work. The scheme is called the Paid Parental Leave scheme and is administered by the Australian Government. Under this scheme, eligible employees can receive pay at the national minimum wage.

Australia was already behind most other OECD nations as the second-last to introduce a government PPL scheme, and while it procrastinated on making such leave more equitable, there were extensive consequences for our gender pay gap.

The numbers speak for themselves:

• In 2021-22, women used 88 per cent of primary carer’s leave, according to the Workplace Gender Equality Agency (WGEA).

• Women account for the majority of part-time workers in Australia. In the month ending 31 December, men had worked approx. 97,000 part-time hours compared to 210,000 for women.

• Australia has the third-highest part-time employment rate in the OECD. 

• Women retire with 23.4 per cent less super than men, according to the Australian Association of Superannuation Funds.

A Treasury analysis found that a woman’s earnings fall by an average of 55 per cent in the first five years of parenthood. 

The Australian HR Institute industry magazine states a major contributor to Australia’s slow progress is the fact that our current PPL scheme actively encourages women to have career breaks and discourages men from doing the same. Also, terminology such as ‘primary carer’ and ‘secondary carer’ sends the message that men should take a back seat.

“The leave imbalance entrenches traditional gender roles. It sends the message that there’s only a minimum role for fathers,” says Dr Leonora Risse, Senior Lecturer in Economics at RMIT University, who specialises in gender equality. “We know there are many fathers who aspire to spend more time with their children to bond with their family, but our current policy settings and cultural norms prevent them from doing that.

Building a well-rounded parental leave policy

When considering the benefits of offering PPL, many organisations go to cost first. They weigh up the short-term price tag, but rarely consider the long-term benefits associated with PPL – in particular, attraction, retention and productivity. 

“For a long time, the support offered by organisations has been seen as a nice-to-have, rather than a talent retention strategy,” says Gilbert. “But it’s more than that. It’s a critical path to closing the gender pay gap, the leadership gap and the super gap, and increasing female participation in the workforce.”

An equitable parental leave policy shouldn’t stop at offering PPL. HR will play a significant role in normalising both parents taking leave and introducing policies to support them before, during and after leave. 

There’s a clear business case for offering PPL and instituting a family friendly workplace culture but there’s more to parental leave than a simple cost-out. Equitable parental leave is a human rights issue. And this is HR’s opportunity to step up, help companies live their values and make a tangible difference to Australia’s gender pay gap. 

“Of course, parental leave is a strategic investment for businesses. But more than that, it’s about people and principles,” says Risse. “Your bottom line will fluctuate, but your principles should stand firm.”

Source HRM Online

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