Trend to Enhanced Parental Leave Options15 February 2022
With staff returning to work for the New Year, and in many cases returning to the office for the first time in 6 months, now is an ideal time to re-engage with staff, review people policies, look at ways to enhance the staff experience, provide flexibility and to incorporate these initiatives into your strategic planning for the year ahead.
One aspect many clients are focusing on is a review of their Parental Leave policy.
Measuring how working parents are feeling through means such as engagement surveys, exit and entry interviews is a good way to keep your finger on the pulse of how your business is doing in this space. Part of this process involves consideration of initiatives to drive gender equity.
Some of the trends in Parental leave include:
- Paid parental leave in addition to the Government’s paid parental leave scheme, with a number of employers topping up to full pay for six months. There is a trend to allowing such leave to be taken over a period of 2 years.
- Continuation of KiwiSaver contributions during parental leave.
- A phased return to work on a full salary eg work 4 days and get paid for 5 days for up to 6 months.
- Paying annual holidays in the first 12 months after return to work, at the full rate.
- Paid leave for partners of 4 weeks in many cases; and up to 8 weeks in some cases.
- Making keeping in touch days worthwhile and properly supporting the transition back to work.
- Increasing the support available to those pregnant at work.
Many businesses are also moving to gender neutral parental leave entitlements.
Due to COVID-19, temporary changes have been made to legislation to allow some employees to go back to work temporarily without losing their remaining entitlement to parental leave, and its associated payments and protections. This means an employee could return to work for up to 12 weeks, and then go back on parental leave.
This change applies if an employee is entitled to parental leave but they return to work early for reasons related to the COVID-19 outbreak, because:
- their skills, experience or qualifications mean that nobody else can fill their role, or
- there is unusually high demand for people in their role.
Potential Changes to the Holidays Act Taskforce Final Report
Currently, if an employee takes annual holidays after a period of parental leave, any holidays taken in the following 12 months are paid at Average Weekly Earnings (AWE) only, which of course means such holidays are paid at a much lower rate than the employee’s AWE before they started parental leave.
As a result, many employees wait 12 months after their return to take holidays, or they take it at full rate before starting parental leave.
This is clearly an issue of gender equity.
The Holidays Act Taskforce recommendations, which the Government has accepted, include removing this limitation. The proposal is that payment for holidays would be the higher of AWE over the last 4 weeks, AWE over the last 13 weeks, AWE over the last 52 weeks and Ordinary Leave Pay (the base rate for any hours worked in the relevant period, plus pay for any scheduled overtime, allowances, incentive or commission payments that the employee would have received if they had worked for the relevant period).
If you would like us to work with you on reviewing your current Parental Leave policy and provide benchmarking information on what other companies are doing in this space, please get in contact with us.
Michelle 021 993 735 or Justine 021 920 410.