The Paid Parental Leave Amendment Bill 2014 (PPLA Bill) was introduced into Federal Parliament by the Minister for Small Business on 19 March 2014.
The PPLA Bill seeks to amend the Paid Parental Leave Act (2010) (PPL Act) to remove the mandatory employer role in administering the current government-funded parental leave payments (PL payments).
The passing of the PPLA Bill would mean that it would no longer be a compulsory requirement for employers to perform the “paymaster” role in the provision of PL payments to their eligible employees. Instead, from 1 July 2014, an employee would be paid PL payments directly by the Department of Human Services (DHS), unless their employer chose to “opt in” to making the PL payments to the employee, and the employee agreed for their employer to pay them.
Under the PPLA Bill, an employer will only be required to provide the PL payments if an ‘employer determination’ is in force for the employer and the employee. An employer determination can only be made if the employer has made an election to pay instalments of PL payments, the election applies to the relevant employee, and certain other conditions are met, including the employee agreeing to their employer paying them.
The PPLA Bill also provides that if an employer determination is made for an employer and employee, but the employer no longer wishes to administer the PL payments to that employee, the employer can decline the “paymaster” role and DHS will provide the PL payments to the employee.
In the Second Reading Speech, the Minister for Small Business said the proposed amendments are in line with the government’s pre-election commitment to “reduce the red tape burden and compliance costs on business by ensuring that they are not required to be the paymaster for the government’s paid parental leave scheme.”
The PPLA Bill is limited to amending only the administrative arrangements for the provision of PL payments to employees. The PPLA Bill does not affect eligibility, entitlement or rates of pay associated with PL payments.
The Abbott Government’s plan to pass a new Bill (proposed Abbott Bill) amending the Paid Parental Leave scheme itself is scheduled to be introduced by 1 July 2014, with implementation to commence on 1 July 2015.
If the proposed Abbott Bill is passed, eligible employees will be entitled to a maximum of 26 weeks’ paid leave set at the employee’s actual income level (capped at a total of $75,000), or at the national minimum wage if higher, plus superannuation. By contrast, the current Paid Parental Leave scheme entitles eligible employees to a maximum of 18 weeks’ paid leave set at the national minimum wage.