Top myths about the Paid Parental Leave scheme for employers

Let’s debunk some of the common myths you might come across as an employer about the Paid Parental Leave scheme.

The Australian Taxation Office or Fair Work Australia is responsible for the Paid Parental Leave scheme

The Department of Human Services is responsible for administering the Paid Parental Leave scheme. We also have a dedicated Business Hotline available to help answer any of your questions.

Businesses are funding Parental Leave Pay

Parental Leave Pay is funded by the Australian Government.

In most cases, employers are required to provide their long term eligible employees with Parental Leave Pay, once they receive the funds from us. You will need to provide it to your employee through their normal pay cycle.

Small businesses are exempt. You need a certain number of staff for your business to qualify

The Paid Parental Leave scheme applies to all employers, no matter the size of your business or the number of staff you have. Even if you have just one employee, you could be involved.

Employers need to work out if their employees are eligible

First, your employee needs to lodge a claim with us. It’s then our job to assess whether your employee is eligible for Parental Leave Pay. We’ll then contact your business if you’re required to provide Parental Leave Pay to your employee.

The Paid Parental Leave scheme applies to full-time employees only

Full-time, part-time, casual, seasonal, contract and self-employed workers may be eligible for Parental Leave Pay.

You are required to provide Parental Leave Pay to an eligible employee who:

  • has worked for you for at least 12 months prior to the expected date of birth or adoption
  • will be your employee for their Paid Parental Leave period
  • is Australian-based, and
  • is expected to receive at least eight weeks of Parental Leave Pay

The Paid Parental Leave scheme changes employees’ leave entitlements

Parental Leave Pay does not change any of your employees’ existing leave entitlements or give them a new entitlement to leave. And, because it’s a payment and not an entitlement to leave, it has no effect on your employees’ leave accrual.

Under the Fair Work Act 2009, if your employee has worked with you for 12 months or more prior to their child’s birth or adoption, they may be entitled to up to 12 months of unpaid parental leave. They can also request an additional 12 months unpaid leave on top of this.

If you currently provide paid maternity or parental leave through an industrial agreement or law, you cannot withdraw that entitlement for the life of the agreement or law.

Employees can take Parental Leave Pay in two or more blocks

Parental Leave Pay must be taken in a continuous block of up to 18 weeks.

Your employee can take it at the same time as any type of paid or unpaid leave. For instance, they could take four weeks of annual leave, then six weeks of paid maternity leave and then eight weeks of unpaid parental leave, all while they’re receiving Parental Leave Pay.

Paid Parental Leave payments employers receive are aligned with their employee’s pay cycle

When you register for the scheme and agree to provide your employee’s Parental Leave Pay, you will elect how you want to receive the funds from us. The options are fortnightly or six weekly instalments.

The reason we ask you about your employee’s pay cycle and pay frequency is so we can make sure we send you enough funds in advance, to enable you to provide Parental Leave Pay to your employee in line with their regular pay cycle.

Employers can’t register for the scheme until their employee makes a claim

You don’t need to wait—you can prepare your business now. You can register for the scheme any time on our website.

An AUSkey or current Australian Taxation Office digital certificate is your shortcut to registering and managing your details online. If you have one, you can register any time through our Business Online Services at humanservices.gov.au If you don’t have one, you can get one at auskey.abr.gov.au

If you choose not to get an AUSkey or you don’t have access to the internet, you can register by calling our dedicated Business Hotline on 131 158.

To find out more about your role in the Paid Parental Leave scheme

For more information about working entitlements and workplace obligations:

Page last updated: 13 September 2016

This information was printed Saturday 3 December 2016 from humanservices.gov.au/business/enablers/top-myths-about-paid-parental-leave-scheme-employers It may not include all of the relevant information on this topic. Please consider any relevant site notices at humanservices.gov.au/siteinformation when using this material.