The Paid Parental Leave Act 2010 (Cth) came into effect
on 1 January 2011, meaning that an employee parent may now apply
for up to 18 weeks of paid parental leave (PPL) at the minimum
Employers are not required to do anything to determine the
eligibility of employees for government-funded PPL. Employees are
required to make an application for government-funded PPL to the
Family Assistance Office (FAO), which will
determine whether the employee is entitled to PPL.
Planning for the PPL scheme
Employers can plan for their part in the PPL scheme by doing the
Determine your PPL obligations under any existing policy,
relevant industrial instruments (including awards) and contracts of
Any existing obligation to pay PPL to employees cannot be
taken away because of the government-funded PPL scheme, except by
lawful means (such as employees agreeing to the variation of their
Consider amending any existing policy to integrate the
government-funded PPL scheme, explaining how existing obligations
and the new PPL scheme interact.
The government-funded scheme is in addition to any existing
policy obligating employers to pay employees PPL. Depending
on the terms of the workplace-funded PPL, employees may receive
both PPL entitlements at the same time or one after the
If you do not have an existing policy or employee entitlement
to PPL, consider implementing a new policy notifying employees
about the government-funded PPL scheme and their new
Consider whether your company will elect into the scheme prior
to 1 July 2011 (when it will become mandatory for employers to pass
PPL payments received from the FAO to eligible employees).
PPL payments will be made to the employer by the FAO and
then it is the responsibility of the employer to pass the payments
onto the eligible employee. It is not a cost borne by the
If you choose to opt into the scheme, register the
employer's details with Centrelink Business Online
Consider and implement any changes to the company's
administrative systems, including payroll, to ensure they are are
able to accommodate the receipt of PPL from the FAO and the passing
on of the payment to the relevant employee.
Familiarise yourself with employer's obligations to
employees receiving PPL and those to the FAO, such as notification
requirements, the deduction of tax and the provision of payment
Watch this space
A bill has been introduced to parliament seeking to reverse the
arrangements requiring employers to make payments on behalf of the
FAO to employees receiving PPL. Parliament is currently
considering the Paid Parental Leave (Reduction of Compliance
Burden for Employers) Amendment Bill 2010. If it is
passed, employers will not be required to make PPL payments on
behalf of the FAO to eligible employees after 1 July 2011.
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This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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