Modernising parental leave

As part of Budget 2014, the Parental Leave and Employment Protection Amendment Bill (No 2) was passed to extend the duration of paid parental leave from 14 to 18 weeks by 1 April 2016.

The Employment Standards Legislation Bill introduced further changes to the parental leave scheme that came into effect on 1 April 2016.

These changes aim to better reflect current work and family arrangements, provide more flexibility and choice, and support parents’ attachment to work. They include:

Extending parental leave payments to non-standard workers and those who have recently changed jobs

The changes extend parental leave payments to people with non-standard working arrangements. This includes casual, seasonal, temporary and fixed-term employees and workers with more than one employer. Also, workers who recently changed jobs are now entitled to parental leave payments, provided they meet the other work-related criteria.

Eligible workers who have multiple employers can combine their hours and income from each job to maximise their payment (up to a maximum cap).

Parents still have the option of choosing parental tax credit instead of paid parental leave.

Extending entitlements to a wider group of primary carers than just biological and formal adoptive parents

Parental leave payments and leave entitlements have been extended to primary carers such as Home for Life parents, whāngai, grandparents, and other primary carers. A “primary carer” is a person who takes permanent primary responsibility for the care, development and upbringing of a child under the age of 6 years. It does not include people with part-time or temporary responsibility such as a childcare provider or a temporary foster carer.

To be eligible, primary carers need to meet the same work-related criteria as birth mothers and adoptive parents.

Enabling workers to take the unpaid parental leave flexibly

In the past all parental leave had to be taken full-time and in one continuous block. When the employee returned to work they lost any remaining parental leave entitlements.

The changes under the Bill allow eligible employees to take the unpaid leave flexibly, or return to work for a period of time and take the remainder of their unpaid leave later in the year, provided there is mutual agreement with the employer.

For employees who have been with their employer for at least 12 months, the end date of unpaid parental leave will be on the child’s first birthday (or one year after becoming the primary carer of the child). This applies whether leave was taken flexibly or not.

For employees who have been with their employer for more than six but less than 12 months, the end date of unpaid parental leave will be when the child turns six months (or six months after the date on which the employee becomes the primary carer).

Introducing “Keeping in Touch” days

The changes also allow workers to work up to 40 hours during the 18 weeks of paid leave. For example, these hours could be used to keep up with skills development or training or completing a work handover, and can help the parent ease back into work.

Keeping in Touch hours are not compulsory and must only be used by mutual agreement between the employer and the employee. They also need to agree on the terms of work and the type of work to be undertaken.

The baby will need to be at least four weeks old before the Keeping in Touch days can be used. This is to protect the baby’s and the birth mother’s health.

Parents of preterm babies are eligible for additional Keeping in Touch hours – up to an average of three hours per week for each week the baby was born prior to the 37 week gestation period. E.g. if the baby was born at 35 weeks, the parent can work up to six hours, in addition to the 40 hours.

Parents of preterm babies don't need to wait for the baby to be four weeks old before using the Keeping in Touch days.

Extending unpaid leave to workers who have been with their employer for more than six months but less than 12

Workers who have been with their employer for more than six but less than 12 months, are now able to take unpaid leave in addition to the their paid leave, up to a total period of six months. For example, if the employee takes 18 weeks paid leave, they can also take eight weeks unpaid leave.

This aligns with the World Health Organisation’s recommendation of exclusive breastfeeding for six months.

Employers can choose to give their employees longer unpaid leave, if they wanted to.

Allowing workers to resign and still receive payments

The changes allow workers to resign, if they wish, and still receive payments. This gives more choice to employees and more certainty to employers. Employers will be able to recruit a permanent replacement, rather than a temporary replacement, in a situation where the employee does not intend to return.

Increasing the penalty for fraud

The penalty for people who make a false statement, or intentionally mislead the relevant agencies has increased from $5,000 to $15,000.

This penalty better reflects the increased maximum parental leave payments a person can receive and aims to deter people from committing fraud.

Providing additional parental leave for parents of preterm babies

The new law also extends the period of parental leave payments for parents of preterm babies. These parents can receive additional weekly payments – up to a maximum of 13 weeks – for each week the baby was born prior to the 37 week gestation period.