EMPLOYER ACTION CODE: ACT

Parliament has approved amendments to the Parental Leave and Employment Protection Act that will increase paid parental leave effective July 1, 2018. In New Zealand, rather than regulate paid maternity, paternity, adoptive and parental leaves as separate and distinct entitlements, the Act considers them as component parts of a general parental leave entitlement, referred to as “primary-carer leave”.

KEY DETAILS

  • Paid primary-carer leave will increase from 18 to 22 weeks effective July 1, 2018, for births or adoptions as of that date or later. It will then increase to 26 weeks from July 1, 2020.
  • Pay replacement benefits are provided by social security based on average weekly pay up to a weekly maximum of NZD 538.55. Average weekly pay is defined as the average of the highest 26 of the last 52 weeks of earnings before the date the child is born or received into the employee's care.
  • Eligibility for primary-carer leave requires an average of at least 10 working hours per week over any 26 of the 52 weeks of covered employment (i.e., at least six months of service) prior to the start of such leave. These hours may be for one or more employers.
  • The number of hours that employees can work as paid “keeping in touch” days, by mutual agreement with the employer, during such leave will increase from 40 to 52 hours, effective July 1, 2018. It will then increase to 64 hours from July 1, 2020. These days are not compulsory and cannot be taken until the child is at least four weeks old.

EMPLOYER IMPLICATIONS

There is no statutory requirement for employers to provide paid maternity (or parental) leave beyond that paid by social security. The new entitlement is well above the average among Organisation for Economic Co-operation and Development (OECD) countries (17.7 weeks in 2016 — OECD data) for paid maternity leave.

Employers are encouraged to review their existing leave policies and ensure that they comply with the new legislation by July 1, 2018.