With the federal parliament last night passing the Paid Parental Leave Bill (PPL Bill) into law, Australia will now have a government-funded paid parental leave scheme from 1 January 2011.
As outlined in our update dated 6 May 2010, the scheme entitles eligible care givers to 18 weeks' paid parental leave at the national minimum wage, which will be $569.90 per week from 1 July 2010. The government-funded parental leave payments will in most cases be administered by employers.
Amendments
After considerable debate in the Senate, the PPL Bill was passed with some significant amendments to the initial exposure draft. Following the amendments, government-funded parental leave payments must be paid in addition to any employer-provided parental leave benefits. This means that employers will not be able to use the government-funded payments to subsidise any existing obligations to provide employees with parental leave payments under contract, industrial agreements or other laws.
However, where employer-provided benefits are provided for in non-binding policies, there will be some scope for employers to use the government-funded payments to offset their own schemes. Nevertheless, the government has been clear that it intends the paid parental leave scheme to be in addition to any employer-provided parental leave benefits.
Review
The paid parental leave scheme is scheduled for review in 2013. In particular, issues relating to eligibility, administration and the scheme's interaction with employer-provided benefits will be considered.
We are conducting breakfast briefings on topical issues in employment law next Tuesday 22 June and Thursday 24 June, with a particular focus on the new paid parental leave scheme. Our Tuesday session is full but a small number of places are still available in the Thursday session.
For further information, please contact: