Time for employers to do a “health check” on paid parental leave
The Albanese Government has made it clear in revamping the Commonwealth paid parental leave scheme that employers also have a role to play.
On announcing his push for the current scheme to be incrementally extended to 26 weeks by the year 2026, with tweaks to further promote shared care and encourage more dads to take leave, Prime Minister Anthony Albanese described the policy as a “national minimum standard”.
He suggested it’s a “foundation” for a wider system, noting that: “We are encouraged that there are already enlightened employers across Australia competing to offer working parents the best possible deal.”
This revamped paid parental leave scheme is the core piece for promoting more shared care across homes, supporting dads to take parental leave, and enabling women’s workforce participation.
But it requires employer-led efforts as well. Why? Because how well an employer supports their employees to transition to parenthood and back to work ultimately influences the ability for parents to take the leave and stay connected to the workforce over the longer term.
The reality is employers have ‘a make it or break it’ impact on parents’ parental leave experience. And as it’s women who still take the majority of parental leave, it’s mothers who pay the price of inadequate parental leave support in lost earnings over their lifetime. And this can have negative impact on family household finances, family relationships, child developmental and health outcomes. With gender-biased employer parental leave schemes still the norm in many workplaces, fathers can miss out on parental leave and this further entrenches the systemic issues around caregiving vs breadwinning stereotypes.
So what exactly is an “enlightened employer”, as Albanese put it?
They are the employers that understand the business case for paid parental leave, and have evolved their policies to support it.
Many such employers, like King & Wood Mallesons, are already offering 26 weeks of leave, available as soon as team members join the organisation.
But these employers understand it’s not just about the weeks offered, but also who can access the leave and how. They have removed gendered labels from their policies including words like “primary carer” and “secondary carer”, to ensure the scheme is accessible for all new parents, as PwC, ING and Perpetual have all done (plus many more).
Some are going one step further, and we suspect many will follow, in paying superannuation during stints of leave, as Norton Rose and KPMG are now doing.
Enlightened employers also take a modern view of parenting, ensuring the leave is accessible to those bringing a new child into their lives through surrogacy, adoption, kinship and foster caring.
And they’re offering other forms of leave, like paid fertility leave for team members undergoing IVF treatment, miscarriage leave for those experiencing pregnancy loss, as well as domestic and family violence leave.
Beyond leave alone, we also see employers getting creative in supporting new parents to return to work and addressing the support needed beyond the first 12 months of bringing a new child into their family. Deloitte Australia recently revamped their policy, which already includes 18 weeks, (regardless of gender), to now include provisions for parents to access an extra day’s pay for working three or four days, or half a day for working one or two days – for the first 12 months after returning from a continuous block of leave. They also provide relief from financial KPIs in those first 12 months on returning. In doing so, they are addressing the financial strain of having a new family, as well as the physical strain that comes with transitioning to becoming a “working parent”.
It’s not only large employers who offer modern paid parental leave policies, we also know of smaller employers making these investments.
So why do firms do this, beyond being the right thing to do? Because it makes good business sense.
As KPMG CEO Andrew Yates said on announcing his firm’s world-leading paid parental leave policy back in 2021 on his first day of the job — and making the leave accessible to team members on day one of the job. “I want to build the most compelling proposition for high quality people in the marketplace, if I’m brutally honest. This is about attracting and retaining the best people and giving people who want to join our organisation flexibility and choice. The concept of having tenure worked against that.” The firm has since reported a 20 per cent uptick in men taking the leave, and has moved to extend the policy once again.
Enlightened Employers know if they’re not offering the best paid parental leave policy, their biggest competitors will be doing so. It’s why we see law firms and accounting firms following each other especially quick, when one moves to make a significant change. For example, it was only in 2019 that Baker McKenzie became the first large law firm to announce gender-equal paid parental leave, but within a couple of years most similar-sized firms have followed.
So my question to all employers out there is just how well are you doing on paid parental leave? Do you know where your competitors are at? And are you fully aware of your role in supporting a more gender-equal Australia?
Just how enlightened are you?
I started Parents At Work in 2007, just prior to the introduction of paid parental leave in Australia. My mission then, as it is now, was to make it easier for all parents to be better supported in taking parental leave, as well as in returning to work. I wanted to make the case for greater investments in such support.
The changes announced by the Albanese Government have been pushed by many different advocacy groups in a long and vocal fight. But these changes can only go so far – the scheme requires further government and employer-led support for Australia to fully access the potential of shared care.
We should fight for employers to be bolstering their offerings to make Australia a great place to have a child, and a healthy place for those children to grow up in.
By Emma Walsh