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Paid parental leave extended to self-employed

Hon Ruth Dyson
Minister of Labour
Hon Lianne Dalziel
Minister of Women's Affairs,
Minister for Small Business

11 May 2006 Media Statement

Paid parental leave extended to self-employed

Self-employed parents will be eligible for 14 weeks paid parental leave from 1 July this year, bringing greater flexibility and equity to the workplace and additional support for working parents, says Minister of Labour Ruth Dyson.

The Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Act, extends paid parental leave to a range of self-employed people including farming families. Paid parental leave was previously available only to employees.

“The new law will make it easier for self-employed parents to look after newborns or newly adopted babies, and reflects the Labour-led government's commitment to supporting working families,” Ms Dyson said.

Women's Affairs Minister Lianne Dalziel, who is also Minister for Small Business, said that this decision would be welcomed by over 2,000 self-employed women or their partners who are expected to benefit from the new Act each year. Like employees, self-employed women will be able to transfer part or all of their paid parental leave to their eligible partners. Their eligible partner may be either self-employed or an employee.

"Self-employed parents will have to stop working while receiving payments, but will be able to maintain a level of oversight of their business which means they will be able to complete occasional and administrative tasks in their business," Lianne Dalziel said.

In another amendment to the Act, both employees and the self-employed will be eligible for a subsequent period of paid parental leave if their expected date of delivery or adoption is at least six months after they return to work from previous leave, down from 12 months at present.

Payments will equal the self-employed parent’s average weekly earnings over the past six or 12 months, up to a maximum of $357.30 a week – the maximum currently paid to employees on paid parental leave.


Background: Paid parental leave

Paid parental leave payments will equal the self-employed parent’s average weekly earnings over the past six or 12 months, up to a maximum of $357.30 a week – the maximum currently paid to employees on paid parental leave.
Those who make a loss or earn less than the minimum wage for at least 10 hours work a week will be entitled to payments for 10 hours a week at the minimum wage (currently this payment would equate to $102.50 a week before tax).

For the self-employed
 The new law applies to those whose baby is due or born on or after 1 July 2006, or who start caring for a child under the age of six they intend to adopt on or after 1 July 2006.

 To be eligible for paid parental leave, self-employed mothers will have been working an average of 10 hours a week or more for either six or 12 months before the expected date of birth of their child.

 To be eligible for paid parental leave, a parent intending to adopt a child under the age of six will have been working an average of 10 hours a week or more for either six or 12 months before the date they or their partner assume care of a child with a view to adoption.

For employees
 Paid parental leave for employees was introduced in 2002. More than 77,500 employees have already benefited from the scheme since then.

 The Department of Labour commissioned Gravitas Strategy and Research in 2003 to evaluate the implementation of the paid parental leave scheme for employees. This concluded that implementation had been smooth with paid leave easily accessible, and the impact on business had been predominantly positive or neutral.

Other government initiatives helping working families

The extension of paid parental leave to the self-employed adds to other Labour-led government initiatives to assist working families. These include the Working for Families scheme – which provides extra financial assistance to many thousands of New Zealand families; and an additional week’s annual leave for employees from 1 April 2007.

Further information for self-employed parents will be available on the Department of Labour website www.ers.govt.nz or by calling the Department of Labour’s Workplace Contact Centre on 0800 20 90 20.


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