Most Read Contributor in Australia, September 2016
The Federal Government proposes to change eligibility rules for
its Paid Parental Leave (PPL) scheme "to remove the ability
for individuals to double dip, by taking payments from both their
employer and the Government."
If this change is implemented, employees applying for PPL on and
after 1 July 2016 will find their PPL benefit affected by any
parental leave payments made by their employer.
The Government states that its intention is for primary carers
to have access to PPL at least equal to the maximum PPL benefit
(currently 18 weeks at the national minimum weekly wage - $640.90
It's not yet clear how this change will be implemented.
For example, if the employer's policy is to pay full pay for
an employee for a period less than 18 weeks will the total amount
paid by the employer reduce the total PPL benefit? Or will the
employee only lose PPL for the weeks that she/he also receives pay
from the employer? What if the policy is to 'top-up' PPL so
that the employee receives their full pay? Will this in effect
reduce PPL by the amount of the top-up?
If employers are considering changing parental leave
arrangements to avoid the adverse impact on PPL benefits for
employees, they might consider providing benefits at other times,
such as before the employee commences parental leave or upon their
return to work.
The effectiveness of these alternative arrangements will depend
on the legislation implementing the change. Furthermore, the
employer's obligation to make parental leave payments may be
enshrined in employment contracts or enterprise agreements. If the
employer ceases making payments during a period where an employee
is receiving PPL, the employer should be aware this will mean the
employee will not accrue paid leave during that period.
The Federal Government will need to pass legislation amending
the Paid Parental Leave Act to give effect to this change. The
Government may not have sufficient support in the Senate to pass
Employers need to think about their paid parental leave
arrangements, current and proposed, in light of this Budget measure
and await more detail of how the change is to work.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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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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