Federal Government announces parental leave changes for small business

MALCOLM FARR
November 20, 2013
news.com.au

SMALL businesses won’t have to do the hard work for the Government on administering paid parental leave under legislation introduced today.

The new system, expected to get the backing of the Labor Opposition, is the first major step in slashing red tape and administrative costs calculated to be draining $1 billion a year from Australian companies.

At present, employers have to act as unpaid pay clerks for the Government to implement its scheme. The legislation hands that job to Centrelink.

“The current system requires employers to process parental leave pay after receiving an employee’s entitlement from Centrelink,” said Small Business Minister Bruce Bilson today.

“It is unnecessarily complex, and forces small businesses to bear the costs of the extra workload and of restructuring their payroll and accounting systems.”

The plan is for small business to be relieved of the parental leave administration costs by March next year.

“This Government knows that employers don’t need extra paperwork, and should be supported to focus on running their business which is why we are honouring our commitment to cut red-tape for small business,” said Mr Bilson.

The Government also wants the reforms to help the introduction of its own paid parental leave scheme giving mothers six months leave based on their actual wage – capped at $150,000 a year – instead of the current scheme of 18 weeks of payment at the national minimum wage.

Employers will still be able to opt in to provide parental leave pay to their employees – possibly at more generous rates – should both the employer and employee agree.

This measure was twice rejected by previous Labor governments but became part of the ALP’s policy platform at the last election.

The Family Assistance Office will administer paid parental leave payments direct to the employee, meaning employers won’t be involved in the process, giving them one less headache to deal with.