Australia: Government Seeks to Redefine Parameters of Paid Parental Leave Entitlements to Prevent Employee "Double-Dipping"

Australia's federal government recently introduced the Fairer Paid Parental Leave Bill 2015. If approved, the new law will amend the Paid Parental Leave Act 2010 to redefine the parameters of paid parental leave entitlements. 

Presently, under Australian law, certain working parents are entitled to receive paid parental leave from the federal government to care for a newborn or recently adopted child.  Specifically, eligible working mothers are entitled to receive up to 18 weeks' paid leave at the national minimum wage.1  In addition, employers may provide for additional paid parental leave benefits, such as maternity leave pay, by way of their registered agreements, employment contracts and/or pursuant to workplace policy.

Because some employees may be able to receive paid parental leave from both the employer and the federal government at the same time, the Australian federal government has expressed the view that there are some employees who are essentially "double-dipping." The proposed changes, therefore, would prevent those employees from receiving the government parental leave benefits.  

The proposed changes would also enable employees who receive employer-provided paid parental leave benefits that are less than the maximum entitlement under the government program to receive a "top up" from the government. 

The proposed amendments further provide that employers would no longer be required to administer the government-funded component of paid parental leave entitlements for employees, unless the employer elects to do so,2 lessening employer administrative and record-keeping obligations with respect to employee parental leave.3

If enacted, the changes to the Paid Parental Leave Act 2010 would take effect on July 1, 2016. Littler will provide further updates on this issue as information is released regarding the proposed legislative amendments.  

See Footnotes

1 The Paid Parental Leave Act 2010 also provides for an entitlement of two weeks of paid leave at the national minimum wage for fathers and partners caring for newborns or recently adopted children.

2 This move to remove the employer's administrative role was also introduced in the Paid Parental Leave Amendment Bill 2014, which is currently before the Senate.

3 Employers of employees who receive government-funded parental leave must keep the following records: (1) the amount of parental leave pay funding received from the government for each employee and the period it covers; (2) the date each parental leave payment was made to the employee; (3) the period each payment covers; (4) the gross amount of the payment; (5) the net amount paid and the amount of taxes withheld; (6) a statement identifying the payment as parental leave; and (7) the amount of deductions made from each payment.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.