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Paid Parental Leave Scheme Touches 100,000

Paid Parental Leave scheme touches 100,000 - scheme celebrated on International Women’s Day

Prime Minister Helen Clark today celebrated a significant milestone in the Labour-led Government's commitment and support for families : More than 100,000 parents have now signed up for Paid Parental Leave since the policy was introduced in 2002.

Helen Clark and other Labour MPs celebrated the occasion on International Women’s Day with parents who have enjoyed Paid Parental Leave.

Helen Clark and Trevor Mallard said that Labour recognises the importance of Paid Parental Leave for the well-being of new babies and for families’ overall health and income.

"Having a child is an important and special time for a family,” Helen Clark said.

“I am proud to see New Zealand families fully embracing paid parental leave since it was introduced in 2002."

“New Zealand’s workforce is ageing and we have ongoing skill shortages. An increasing number of women are in the workforce. At the same time, family structures and parenting arrangements have become more diverse, and women tend to have fewer children and have them at a later age. In these circumstances, Paid Parental Leave has become a very important part of the range of policies the Labour Government has introduced to support families.

“Since first introducing PPL in 2002, a number of extensions to the scheme have been made. The length of paid leave has been extended from the original twelve weeks to fourteen weeks in 2005. In 2004 employees who had six months service or more with the same employer were included. In 2006, self-employed parents were included,” Helen Clark said.

“Labour is committed to ongoing reviews and improvements to Paid Parental Leave, and notes the advocacy of the Families’ Commission for that.

Labour Minister Trevor Mallard said Paid Parental Leave is an important feature of Labour’s policy to support children, and families.

“Labour is very proud that we introduced paid parental leave in the face of very stiff opposition from National who voted against. It’s a very popular scheme and we know that it has made a real difference to families and new parents.

In addition, late last year, the Parliament passed the Employment Relations (Flexible Working Arrangements) Amendment Act to provide employees with the right to request flexible working arrangements from their employer and a process for employers to consider those requests.


Attached: Background information on Paid Parental Leave


March 2008

BACKGROUND INFORMATION

Paid Parental Leave

History

For 20 years, the Parental Leave and Employment Protection Act 1987 (the Act) has provided an entitlement for women and their spouse/partners to take employment protected leave on the birth or adoption of a child.

In 2002, the Act was amended to provide 12 weeks of paid parental leave to eligible employees. This amendment built on an existing entitlement of up to 52 weeks unpaid parental leave under the Act. Subsequently, the Act has been further amended to extend paid parental leave to:

13 weeks from 1 December 2004

employees with at least six months continuous service with the same employer (down from 12 months) from 1 December 2004

14 weeks from 1 December 2005, and

self-employed parents from 1 July 2006.

Objectives

The Act’s current objectives are as follows:

Access to leave and payment to parents with workplace attachment

Gender equity in the labour market, including

increased labour force retention and attachment

enables a return to work without disadvantage to pay or position

recognises childbearing as a natural function that requires mothers to take time off work

Gender equity within families, including improved support for fathers/partners access to and take-up of leave

Improved health outcomes for mothers, babies and children, and

Income stability during a period of significant transition for families.

Paid parental leave scheme

Currently, up to 14 weeks of statutory paid parental leave is available to eligible parents. To be eligible for paid parental leave, employee birth mothers or parents intending to formally adopt a child, must have worked for the same employer for at least six months for an average of 10 hours per week. Self-employed parents must have been self-employed for at least six months for an average of 10 hours per week.

Mothers can transfer all or part of their entitlement to their spouse/partner (including same-sex) if they are also eligible.

Parents receive either their gross weekly rate of pay (before tax) or the current maximum rate of payment ($391.28 per week before tax), whichever is lower. Self-employed parents who make a loss or earn less than the equivalent of 10 hours pay at the highest rate of minimum wage, will receive the current minimum rate of $112.50 per week before tax.

The maximum rate for employees and self-employed parents is adjusted on 1 July each year to reflect any increase in average weekly earnings, as measured by Statistics New Zealand's Quarterly Employment Survey. The minimum rate for self-employed parents is also adjusted on 1 July each year and is equivalent to 10 hours' work at the highest rate of minimum wage that applies under the Minimum Wage Act 1983 at that date.

The following data outlines the uptake of paid parental leave:

102,760 parents have taken paid parental leave since it was introduced in 2002

In the 2006/07 year, 27,279 parents took paid parental leave, and of these, 25,468 were employees and 1,811 were self-employed, and

In the year to date (ending January 2008) 15,187 parents have taken paid parental leave, and of these, 14,126 were employees and 1,061 were self-employed.

Other parental leave entitlements for employees

Up to 52 weeks of extended unpaid leave (minus any paid parental leave taken) is available to parents who have worked for the same employer for at least 12 months, for an average of 10 hours per week. This leave can be shared between eligible parents.

Up to two weeks of unpaid partner/paternity leave is available to spouses/partners who have worked for the same employer for at least six or 12 months, for an average of 10 hours per week.

Women can take up to 10 days of special leave prior to parental leave for reasons connected with their pregnancy, e.g. antenatal checks.

Evaluation

The Department of Labour conducted an extensive evaluation of parental leave in 2005/06. The purpose of the evaluation was to test how well the scheme is meeting its objectives. The evaluation examined the experiences of mothers, fathers and employers, as well as those ineligible for parental leave. Overall, it found that the scheme enjoys considerable support from parents and employers alike, and it identified areas where parental leave could be improved to better meet its objectives.

Key findings from the evaluation include:

Mothers

Approximately 80 percent of working mothers are eligible for paid parental leave (not including self-employed women) and about 80 percent of these women took paid parental leave. After the inclusion of self-employed parents within the scheme, the Department of Labour estimates that approximately 90 percent of working parents are now eligible for paid parental leave.

Paid parental leave is typically taken at the end of all other available paid leave, and allows eligible mothers to extend the total amount of leave taken.

Mothers are not using the full entitlement of leave available. On average, most mothers return to work when their baby is six months old, but would like to return when their baby is 12 months. The biggest barrier to taking the full 12 months of parental leave available is financial pressure, for mothers from all income groups.

Two-thirds of mothers who took paid parental leave and then returned to work, went back to the same employer.

Most mothers change their working arrangements when returning from leave, and the most common change is a reduction in the hours of work – two-thirds of mothers worked part-time following the birth of a child compared with one-third before the birth.

Fathers

Most fathers take some sort of leave around the birth or adoption of a child. Very few fathers use the unpaid paternity leave and tend to take two weeks of annual leave instead. Their preference would be to take four weeks of paid leave concurrently with the mother.

Employers

Two-thirds of employers agree that paid parental leave allows them to plan and manage workloads with greater confidence.

Employing someone to cover the position of an employee on parental leave is one of the most difficult aspects for employers to manage; particularly for SMEs who prefer to re-allocate work across existing staff rather than hire temporary staff.

Employers typically accommodate changes in working patterns for mothers on their return to work on an ongoing basis; however, they tend only to be supportive of changes to fathers’ working patterns around the time of the birth or adoption.

Domestic context

The Choices for Living, Working and Caring plan of action sets out the government’s goals for supporting the work and care transitions of parents. In this context, parental leave policy contributes to a continuum of care, education and work that enables families to make the best choices in these areas. Choices also outlines the government’s intention to develop parental leave policy that supports parents who wish to care for their children in their first year of life while taking a break from paid work.

In July 2007, the National Advisory Council on the Employment of Women provided advice to the Minister of Labour on its view on priority improvements that should be made to the parental leave scheme. In August 2007, the Families Commission released a report on parental leave, It’s About Time: Towards a parental leave policy that gives New Zealand families real choice. In response to the Families Commission’ report, the Minister of Labour restated the government’s commitment to the ongoing review and improvement of the parental leave scheme, and outlined the following specific areas of priority for future consideration:

those women in paid work who remain ineligible for PPL, including seasonal and casual workers. These are primarily women may or may not have a record of workforce participation, but not with a consistent employer and/or pattern of employment

the payment level of PPL

the duration of PPL, and

fathers’/partners’ access to PPL.

International context

A number of international instruments require member States to implement initiatives in the areas of maternity leave and work-life balance, including the United Nations Conventions on the Elimination of Discrimination against Women, and on the Rights of the Child, which New Zealand has ratified. New Zealand has not ratified ILO Conventions 156 on Workers with Family Responsibilities and 183 on Maternity Protection.

Trends in the provision of parental leave internationally are marked by the strengthening of statutory leave policies, increasing the flexibility of leave entitlements to support family transitions, and extending and encouraging fathers’ access to parental leave.


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