Things to Consider When Creating a Parental Leave Policy For Your Business

parental leave policy

Do you have a parental leave policy in place? If any of your employees are expecting or adopting a child, familiarising yourself with the various parental leave options is essential. 

In this article, we’ll explore what exactly a parental leave policy is and the top reasons why your business needs one. 

Six Reasons You Need A Parental Leave Policy

Before jumping into why you need a parental leave policy, let’s start by defining parental leave.

Although the term “maternity leave” has long been used, the idea of a parental leave entitlement has developed into an all-encompassing term. Parental leave is a general term used for either parent, which includes:

  • Birth-related leave
  • Unpaid special maternity leave
  • Adoption-related leave
  • Stillbirth-related leave

With parental leave encompassing so much, you need to have your company’s exact terms written out in a policy. There are several reasons it’s essential to have a parental leave policy in place that helps both your company and your employees. 

Here are six reasons you need a parental leave policy in place.

parental leave policy
1. Avoids Conflicts 

A typical work policy outlines a process to avoid any conflicts. A parental leave policy is no different.

You may know someone who has had a great parental leave experience with their employer, and chances are you’ve heard of some horror stories of employers not honouring a law or policy, or an employee who has broken a pre-agreed policy. 

In the end, you and your employees are protected if you have a written parental leave policy. 

2. Be Proactive

With 26% of men and 28% of women reporting being ‘very likely’ to become parents, there is a high likelihood that a staff member will require parental leave at some stage, so it’s a good idea to be proactive and have a plan in place.

What’s more, taking a break is essential for any working parent who is physically recovering from giving birth or wants to spend time nurturing their young baby. Letting your employees know they are entitled to this much-needed break early on relieves some stress for them at work.

3. Better Structure Your Parental Leave Payment

The most important part of parental leave is payment, and this should be the core of your parental leave policy. 

A policy will outline how the payments work and who is responsible for payments during parental leave. Parental leave pay is based on the weekly rate of the national minimum wage. According to Services Australia, an eligible employee can get it for up to 18 weeks, which is 90 payable days. It will include a continuous period of Paid Parental Leave for up to 12 weeks, which is 60 payable days.

If your parental leave payment structure will differ from the basis set out above, ensure that it’s clear in your policy.

4. To Differentiate Paid and Unpaid Parental Leave

Parental leave doesn’t always have to be paid – you can also offer unpaid parental leave. However, it’s essential to be familiar with both unpaid leave and paid parental leave in case someone gets a shock when the money doesn’t come in! This is where a good parental leave policy can make things clear.

The company should use a Parental Leave Policy to outline flexible unpaid parental leave – governed by the Fair Work Act and the Australian Government Paid Parental Leave scheme (PPL). Where applicable, it may include any company-funded parental leave pay. Make this clear in your policy to avoid any confusion among your employees.

5. Stay Competitive in the Market

Another key reason for creating a parental leave policy for your business is to stay competitive in the market.

In reality, parental leave policies have become the norm and are one of the top benefits job seekers look for when looking at an employment compensation package. If you don’t have a good parental leave policy – or no parental leave policies at all – you may have some good candidates pass over your job offer.

Check out the parental leave policy that your competition offers to give you an idea of what you should be offering. 

6. Improve Retention

Employee turnover is expensive, so you must do everything possible to retain your employees. One tool that you can use is implementing an excellent parental leave policy.

Transitioning from being a parent to returning to the workplace is challenging. As a result, many people end up temporarily or permanently leaving the workplace after becoming parents. This could lead to you losing a great employee.

However, offering an excellent parental leave policy provides your employees extra support and shows your company’s values. When employees feel supported, they’re much more likely to return to work.

As a result, parental leave pay and unpaid leave entitlements help your permanent employees and improve your bottom line.

Where Do I Find A Parental Leave Policy For My Company?

Avoid conflict and support your employees by creating a parental leave policy that outlines what they can expect. HRonHand’s parental leave policy covers everything you need your parental leave entitlement policy to cover, including:

  • Terms
  • Eligibility (Are secondary carers covered, or only the primary caregiver?)
  • Period of leave
  • Extending leave
  • Reducing leave
  • Timing
  • Notice and evidence
  • Paid leave
  • Unpaid leave
  • Adoption leave
  • Transferring to a safer job
  • Replacement workers
  • Keeping in touch days
  • Accruals

Get started on your human resources policy today with this Parental Leave Policy template.

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