Priority Improvements to Parental Leave
Recommendations
Executive Summary
1. The parental leave scheme's objectives are to support:
- gender equity within the labour market
- gender equity within families
- improved health outcomes for both mother and child
- income stability for families.
2. The 2005/06 evaluation of the parental leave scheme by the Department of Labour found considerable support for paid parental leave (PPL) with: an 80% take-up rate by eligible mothers; most mothers returning to the same employer following parental leave; and employers often accommodating part-time and flexible work arrangements for mothers on their return to paid work. Parents, however, are not using the full entitlement of leave available and want to take leave for twice as long as they actually do; fathers are not using the unpaid partner/paternity leave; some workers are not eligible, especially seasonal and casual workers; and employers find it difficult to manage work flows whilst staff are on leave.
3. NACEW's recommendations on priority improvements to parental leave will strengthen performance against the scheme's objectives. The recommendations received almost universal support from the 16 individuals and groups who responded to a short consultation.
4. The recommendations are to:
- Widen the eligibility criteria to PPL by allowing workers to achieve the qualifying hours in any number of parallel or sequential jobs.
- Lengthen the period of PPL to one year with an extension to six months as a top priority and then increase the level of payment. This will enable more parents to make optimal choices for their children's development. This is likely to increase the total leave taken by some parents, mothers in particular, but also supports the labour market attachment of parents in the longer-term.
- Introduce a new PPL entitlement that is ring-fenced for fathers. This would assist working fathers to take parental leave and support them to be more involved in the early care of their children.
- Provide for both mother and fathers on PPL to work for a limited number of days. Enabling parents to work for a limited number of days with their same employer whilst on PPL would make both the start of leave, and return to work, easier for both employers and employees to plan and manage.
- Provide for flexible leave arrangements in line with decisions on the Employment Relations (Flexible Working Hours) Amendment Bill. Flexible leave arrangements would meet parent's expressed needs regarding the balance of work and care responsibilities and support retention of staff.
Introduction
5. This paper responds to your request for NACEW's views on priorities for possible improvements to the parental leave scheme, following the government's evaluation of the scheme in 2005/06.
6. The evaluation highlighted a large degree of support for PPL from parents and employers. This support provides an opportunity for government to set out a bold future path for expanding parental leave that would see New Zealand as a world leader in supporting the work-life balance choices of new parents.
7. Maintaining women's labour force participation is critical for the workforce of the future, and children benefit from spending time with their fathers. The recommendations will: lead to better family outcomes, support the health and well-being of mothers and children, encourage greater gender equity at work and within families, provide greater income stability for families, and are also likely to assist employers to manage workflow when parents are on leave.
8. The recommendations will also contribute to the Government priorities of:
- Economic Transformation, through ensuring that New Zealand employers can compete globally for prime-aged workers as the population ages
- Families Young and Old, through enabling more families to benefit from the scheme and to make it easier for them to take time off work to care for infants, and more viable for fathers to share parenting and care work
- National Identity, through reinforcing New Zealand as a family-friendly country with a commitment to gender equity and child development.
9. The paper first considers the scheme's objectives and the findings of the evaluation. It then discusses NACEW's recommendations and how they will support the objectives of the scheme. Our final recommendations reflect both the feedback received and further deliberations on the draft recommendations.
Objectives
10. The Parental Leave and Employment Protection Act 1987 provides an entitlement for women and their spouse/partners to take leave from employment on the birth or adoption of a child. Its genesis was maternity leave legislation passed in the early 1980s, which was based on an anti-discrimination and job protection framework and was confined to the first year of a child's life. Paid parental leave was introduced in 2002 and, since then, the Act has been amended twice to extend the duration of PPL, broaden the eligibility criteria, and extend PPL to self-employed parents.
11. The key objectives of the parental leave scheme are:
- Gender equity within the labour market with increased female labour force retention and the opportunity to return to paid work without disadvantage to position or pay.
- Gender equity within families with fathers sharing leave and caring responsibilities.
- Improved health outcomes for both mother and child with a mother being able to recover from childbirth, bond with a new baby and return to work without negative consequences to her health and that of her child.
- Income stability for families to provide a period of financial security during the leave period.
2005/2006 Parental Leave Evaluation
12. The evaluation explored the experiences of mothers, fathers, employers, and those ineligible for parental leave. It found that the scheme is working well, particularly in the following areas:
- 80% of eligible mothers take up PPL
- The scheme supports the health and well-being of mothers and their babies on the birth of a child
- It provides some financial assistance during a significant period of transition for families, and parents use PPL in conjunction with other leave, such as annual leave, to extend the overall length of time they spend on leave
- A majority of mothers return to work after a period of leave, and the majority of those mothers return to the same employer
- Employers accommodate changes in mother's work arrangements after they return to work, particularly part-time and flexible work arrangements.
13. The evaluation also found some areas for improvement:
- Parents would like to take more leave. On average, mothers return to work when their baby is six months old but would like to return when their baby is 12 months old, and fathers take two weeks leave but would like to take four weeks leave at the same time the mother is on leave
- Parents return to work earlier than they would like due mainly to financial constraints and pressures
- Fathers are not using the unpaid partners/paternity leave and are instead using annual leave at the time of the birth/adoption of their child
- The eligibility criteria mean some working parents are not covered by the scheme including casual and seasonal workers and multiple job holders
- Employers find it difficult to manage work flows when a parent is on leave, especially SMEs who tend to reallocate work amongst existing staff rather than hire temporary staff.
