Business looking for tweaks to parental leave in Senate report

A Senate report on the Government’s paid parental leave scheme will be tabled today, with small businesses hoping to see changes regarding how payments will be made to employees.

The report comes as the bill passed through the House of Representatives earlier this week, with the Government hoping to have the scheme passed within the next two weeks before Parliament’s winter break.

The scheme will allow a primary carer, which the bill identifies as “usually the mother”, to receive up to 18 weeks pay at the national minimum wage of $543.78 per week. The legislation is set to come into effect on January 1, 2011.

While it seems likely the bill will pass, given the legislation has the Coalition’s support, businesses and politicians are still looking for some small tweaks.

Peter Strong, chief executive of the National Independent Retailers’ Association, says he is in support of the paid parental scheme but maintains businesses shouldn’t be involved in the payment process.

“We have no problem with the scheme. It’s just that it creates extra red tape for business, and with extra regulations being thrown at business over the past decade or so, they shouldn’t have to be involved in the program.”

The bill mandates small businesses actually make the payments to employees in order to stay connected with the mother when she is out of work.

While the Government says businesses won’t have to make those payments until they have received funding from the Family Assistance Office, Strong says businesses should be taken out of the picture altogether.

“The payments should go directly to the person who’s eligible for them. I know the Government wants employees to stay connected, but in small businesses they will be connected through necessity, because everyone will know them.”
“In big business, they’ll just see the person as a number anyway and the CEO won’t even care. The best thing to do is just have the payments made directly.”

Apart from clarifying some practical issues of the bill, the Senate report is expected to detail how the scheme will work alongside existing paid parental schemes used by employers.

Heather Ridout, chief executive of Australian Industry Group, says her organisation is also supportive of the scheme but there are some technical details that need to be cleared up so businesses won’t be at a disadvantage.

“The applicant for parental leave applies to the Government, and then it looks at the eligibility of the employee to determine if they can receive payments,” AIG national industrial relations director Stephen Smith says.

“But the bill states a note is sent to the employer and it has 14 days to accept all the Government’s findings. But we would like to extend that to 21 days, we think 14 days is a bit tight.”

In its submission to the Senate, the AIG says this matter is important because businesses can receive a penalty of up to $33,000 for a failure to provide an acceptance notice or application for review within 14 days.

The bill is set to pass the Senate, with Opposition leader Tony Abbott saying the coalition will let the legislation pass but with an intention to amend it if it wins the election later this year. This amendment would probably involve more payments.

But some in Canberra have lobbied for the plan to be improved before it becomes law. Family First senator Steve Fielding told The Australian yesterday that the scheme should be amended so stay-at-home mothers are included.

“If prisoners and prostitutes can get the payment, then I think stay-at-home mums should be able to as well,” he said.

It is understood some prisoners would be eligible for the scheme in some circumstances, due to completing some pre-release work in communities.

A spokesperson for the FAO told SmartCompany last month that for employees who receive less than eight weeks of payments, the employer will not have to make payments and the Government will make those payments directly.

“The FAO will be responsible for paying eligible employees who take less than eight weeks of paid parental leave: for example, where an eligible father takes the remainder of a mother’s Government-funded leave after more than 10 weeks,” the spokesperson said at the time.

Employers can choose to receive advances of funds from the Government, “in as few as three instalments”, and will only be required to pay the employee when they have received sufficient funds.

Additionally, claimants must have undertaken at least 330 hours of paid work during the 10-month period, with an income limit of $150,000 to apply based on the primary carer’s adjusted taxable income in the previous financial year before the claim or birth.