As new parents, the first few weeks and months after the arrival of a child can be both joyous and overwhelming. It's a time when parents need to bond with their newborn and establish a routine, which can be difficult to do while juggling work responsibilities.
That's why many new parents naturally want to take time off from work without the fear of losing their jobs. However, for many working parents, taking extended leave can be financially challenging, and the fear of losing their job can add an extra layer of stress.
Fortunately, in many countries, there are laws and policies in place to protect the rights of new parents to take time off work to care for their children.
In New Zealand, the Parental Leave and Employment Protection Act 1987 governs the rights of new parents to take time off work to care for their child and sets out an employer’s responsibilities in this regard.
Beyond providing leave entitlements, the Act provides job protection for employees taking parental leave.
Employers must understand the Act to ensure they comply with the law and avoid potential legal issues. But, navigating it can be a minefield for employers, particularly with the many other types of leave available, such as sick, bereavement, and annual leave.
To help you understand when an employee is entitled to parental leave and how much leave they are entitled to, here is our easy-to-read guide.
The Act sets out the minimum entitlements for parental leave and aims to protect the rights of employees during pregnancy and parental leave.
All leave provided under the Act is unpaid parental leave unless the employer has agreed otherwise under an individual employment agreement. In other words, the Act doesn’t account for paid parental leave entitlements.
However, employees may be entitled to government-funded parental leave payments during their leave period.
You may be interested in reading about the differences between collective and individual agreements.
The 6-month employment criteria require that the employee has worked for their employer for at least an average of 10 hours per week over a period of six months immediately before the expected due date, adoption date or the date when they assume permanent responsibility for the care of a child under six years old.
In this case, your employee can take:
The criteria are similar for the 12-month rule: an employee must have worked for their employer for at least an average of 10 hours per week over a period of 12 months immediately before the expected due date, adoption date or the date when they assume permanent responsibility for the care of a child under six years old.
In this case, your employee can take:
The purpose of these days is to allow employees to stay connected with their work and maintain their skills and knowledge while on leave.
While employers may be disappointed by an employee's decision not to return to work, it's important to handle the situation respectfully and professionally.
Regarding compliance with the Act and how this impacts your payroll, the employee’s termination date will be when they started their parental leave. This means that if they have any annual leave owing to them, you must calculate it from this date.
It’s worth noting that under the Holidays Act 2003, parental leave counts as continuous employment, which means that employees on parental leave continue to accrue their annual leave entitlements. However, the calculation is based on the average weekly earnings, not their ordinary weekly pay.
You may be interested in reading our Guide to Employment Law NZ: Holidays Act 2003.
Yes, if an employer makes an employee redundant while on parental leave, they must still pay agreed-upon redundancy pay.
Here are some ways that cloud payroll software can assist with managing parental leave entitlements:
Overall, cloud payroll software can automate many of the administrative tasks associated with managing parental leave entitlements, freeing up HR and payroll teams to focus on other important tasks.
As we've discussed, it's crucial for employers to understand their obligations under the Act and to use tools like cloud payroll software to manage parental leave entitlements and ensure compliance.
With the right support and resources in place, employers can create a supportive and inclusive workplace culture for new parents, helping them balance work and family demands and promoting employee retention and satisfaction.
If you’re considering shifting your payroll processes from manual to automated, Pay Cat is a team of experienced payroll specialists who can help you navigate the complexities of implementing cloud payroll software, such as Employment Hero.
Our team has deep expertise in payroll management and compliance, and we’ll work closely with you to understand your unique needs and tailor our services accordingly.
Book a demo today to find out more.