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  • Change to paid parental leave: What it means for your business

    21 June at 09:38 from atlas

    The extension of paid parental leave to 22 weeks aims to reduce financial stress on working families with newborns and young children. It will allow more time for those carers who aren't in a position to take additional unpaid leave to bond with their children.

    Remember that these changes will apply from 1 July 2018, so entitlements will be different for different staff, depending on when their leave starts.

    How will it affect my business?

    Employers are already required to provide a minimum of six months (26 weeks) of job-protected leave to eligible employees (if the employee has been working for them for between six and 12 months.) For employees who have worked for them for 12 months or more, the period of job-protected leave is one year.

    The change doesn't require employers to provide any additional leave. It might provide more certainty for employers, given the likelihood that more parents may take the full 26 weeks if the majority of the leave is paid. So, it could give employers greater confidence about the length of time they need to backfill the role.

    From 1 July 2018, the number of hours that an employee can do paid work ('keeping in touch' hours) while they are on parental leave increases from 40 hours to 52 hours during the parental leave period, and will further increase to 64 hours from 2020.

    Who is eligible for parental leave payments?

    • The primary carer of a child under 6 years (mother, spouse or partner or someone otherwise taking permanent primary responsibility for the care, development and upbringing of the child) who has:
      • worked at least an average of 10 hours per week over any 26 of the 52 weeks before the baby's due date, or the date a child under six comes into their care.
      • been self-employed for at least an average of 10 hours per week for at least 26 of the 52 weeks up to the baby's due date or the date the child comes into their care.
    • Some employees who aren't eligible for parental leave can still get parental leave payments, as long as they aren't working.

    Amount of weekly parental leave payments?

    If you're an employee, the amount is the greater of:

    • your ordinary weekly pay, or
    • your average gross weekly income up to the maximum weekly amount of $538.55.

    If you're self-employed, the amount is the greater of:

    • your average weekly earnings, or
    • the minimum amount of parental leave payable to an eligible self-employed person up to the maximum gross weekly amount of $538.55.

    Employees and self-employed can apply to Inland Revenue for paid parental leave before the baby's birth, or any time up until 12 months after the child's arrival. They must apply before they return to work for any employer or to self-employment.

    Inland Revenue makes the parental leave payments, not employers. 


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