Paid Parental Leave Increases and Flexible Parental Leave on the Horizon?

General / 25 November 2017
Paid Parental Leave Increases and Flexible Parental Leave on the Horizon?

The Parental Leave and Employment Protection Amendment Bill (Bill) was introduced to Parliament by Workplace Relations and Safety Minister Iain Lees-Galloway on 8 November 2017. Aligned with the Labour Party’s (Labour) pre-election policies, the Bill proposes to extend protections for families by increasing paid parental leave entitlements to 22 weeks from 1 July 2018, and to 26 weeks from 1 July 2020.

Labour also proposes to enable female employees to take at least 20 weeks of their primary carer leave after the expected date of delivery.

Current law
The Parental Leave and Employment Protection Act 1987 (the Act) sets out minimum entitlements for employees whilst pregnant or taking parental leave. Currently, employees can receive parental leave payments for up to 18 weeks on the birth or adoption of a child, and may share their leave with their partners.

Labour’s rationale for this change is that New Zealand parents’ entitlements to paid parental leave is one of the lowest in the OECD.  The last increase to parental leave was in April 2016 when parental leave was increased from 16 to 18 weeks.

After taking urgency on a 60 to 55 vote, Parliament has given a second reading to the Bill which now needs to go through its third reading prior to becoming law.  The chance of the Bill passing into law is high given the National Party’s indication that it would also extend paid parental leave.

What does this mean for you?
Labour estimates that the proposed changes will come at a net cost of $325 million. These costs are fully tax payer funded.  The only costs to employers are those associated with finding sufficient cover for an employee’s absence from work while they are on parental leave.  The changes do not affect the entitlement to extended leave of up to a maximum of 52 weeks (depending on length of employment).

Labour has also indicated that it intends to consider broader changes to make parental leave more flexible, including by allowing both parents to use parental leave at the same time.  This is likely to be proposed in broader legislative changes next year – we’ll keep you posted as more information comes to light on that front.

Questions commonly arise in relation to parental leave, including regarding notice requirements, entitlements, and how best to structure cover for the period of leave, as well as what the options are for returning to work with reduced hours.   If you would like advice in respect of parental leave issues, please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.

November 2017

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