Parental leave guide for employers: Your questions answered

We know that small business operators often wear multiple hats. You could be putting out HR fires one day or responding to social media enquiries the next. Your time can easily be spent in one area of the business, only to find another has been neglected or requires immediate attention.  

Parental leave requests can be one of those things you don't see coming. While you might have a small, close-knit team, you can still feel blindsided when an expectant mum or dad shares their baby news and starts talking about parental leave. That's not to say you're not excited for them, but understandably, you may feel overwhelmed if you haven’t yet had an employee go on parental leave in your business. 

Until now, there hasn't been a playbook for small business owners to know how to handle parental leave conversations or provide best practice support for their parents and carers.  

As small business owners, we understand how difficult it can be to find easy-to-read information when you need it. This guide aims to create a resource you can dip in and out of when the need arises, so you can confidently go into conversations and understand your obligations and responsibilities.  

An employee just told me they're expecting. What do I need to do first?  

• Congratulate them!  
  This time in a person's life can be fraught with anxiety as it is one of the most significant transitions a person will go through in their lifetime. Showing your enthusiasm and support will be long remembered.

• Discuss any flexible working needs 
  If your employee is pregnant (and possibly also for older children), discuss any flexible working arrangements to attend perinatal appointments or accommodate symptoms so they can continue working safely while pregnant. Remember that under the Fair Work Act 2009 (FW Act), pregnant employees who have completed at least 12 months of continuous service (including casual employees who have been employed on a regular and systematic basis for at least 12 months and who have a reasonable expectation of ongoing employment on the same basis) are entitled to request flexible working arrangements. However, it's worth considering extending flexible working arrangements for other pregnant employees who are not strictly entitled to make a request under the FW Act.

• Don't make assumptions  
  Don’t assume you know how dads or mums might be feeling, or what they can or can’t do. Remember: Ask, don’t assume.  

• Talk about formal notice  
  Your employee is only required to give notice 10 weeks before starting a period of unpaid parental leave, and is only required to confirm the intended start and end dates of their leave (or advise of any changes) four weeks before their intended start date, so don’t expect them to have all the answers yet.  Note: Adoptive parents are often given very short notice and may not be able to provide such advance warning.  

• Get up to speed on the different types of leave available to your employee (see below)  

• Register your business to participate in the government's Paid Parental Leave scheme.  
  You can read more about this process here.  

Our Parental leave toolkit for managers provides you with all the tools and information you need to have these early conversations.  

My employee is undergoing fertility treatment. What are my obligations?  

There are many hidden journeys to parenthood, and fertility issues are more common than people may realise. One in six Australian couples will struggle with infertility, and one in 25 babies are now born via IVF in Australia.  

Employees undergoing assisted reproduction treatments may need time off work to rest or recover from procedures and appointments. This is a time when employees can benefit from more flexible working arrangements. Under the FW Act, employees will need to use their personal or annual leave for time off for fertility and reproductive health, but you may consider making accommodations. For those taking fertility drugs, they may appreciate some additional flexibility on the days when they may not be feeling well. Your support here can go a long way.  

Note: Employees undergoing fertility treatments may be covered under applicable discrimination legislation, and in those circumstances cannot be treated less favourably than other employees. 

What are the different types of parental leave?  

Unpaid parental leave  

Under the FW Act, all national system employers are obliged to provide up to 12 months of unpaid parental leave to a permanent employee who has at least 12 months’ continuous service. Casual employees who have been employed on a regular and systematic basis for at least 12 months and who have a reasonable expectation of ongoing employment on the same basis are also entitled to unpaid parental leave. To be eligible for unpaid parental leave, the employee must have responsibility for the care of the child.

In addition to this entitlement, an employee may request an additional 12 months of unpaid parental leave, which can only be refused after discussing the request with the employee and based on reasonable business grounds. 

It is important to remember that both parents of a child are entitled to 12 months’ unpaid parental leave.  Both parents can also apply for an extension to their period of unpaid parental leave.  This means that the amount of unpaid parental leave one parent of a child takes has no impact on the entitlement of the other parent.

Businesses can choose whether to pay the employee for any part of this parental leave (see below). 

Government-funded Paid Parental Leave 

The government funds minimum wage payments to eligible employees during their Parental Leave. Government-funded Paid Parental Leave can be shared between both parents of a child. Single parents can receive the full amount. In the case of a parent couple sharing the payment, 10 Parental Leave Pay days will be reserved for the partner of a birth mother or first adoptive parent. The birth mother or first adoptive parent must give approval to share any Parental Leave Pay days with the other parent.  

Employees are currently entitled to 110 days (22 weeks) of Paid Parental Leave for children born on or after 1 July 2024, which can be shared between both parents. The total parental leave pay will increase by a further two weeks each July, until 2026 when it will be 130 days (26 weeks).   

As a business owner, you must administer this payment for employees who are eligible to receive the Government-funded Paid Parental Leave in circumstances where an employee: 

• Has worked for you for at least 12 months before the date or expected date of birth/adoption and: 

  • Is permanent full-time, part-time or casual. 

  • Stays employed until the end of the Parental Leave period. 

  • Is expected to receive eight weeks or more of Parental Leave Pay.  

In addition to the above, Services Australia have their own eligibility criteria in order to assess who can receive Government-funded Paid Parental Leave, which includes the following: 

• Work test – employees need to have worked for both 10 of the 13 months before the birth or adoption of the child and a minimum of 330 hours, around one day a week, in that 10-month period. 

• Income test – an individual must be earning $175,788 or less in the 2023-24 financial year to be eligible. If an employee doesn't meet the individual income test, you can use a family income test, which is up to $364,350 in the applicable financial year.  

Note: Employees can receive the government parental leave pay directly from Services Australia or from you in their usual pay run, if you are registered to receive the payments. You can read more about this process here.  

Employer-paid parental leave  

You are under no legal obligation to provide employer-paid parental leave on top of the government scheme.  

According to the Workplace Gender Equality Agency, three in five small business employers now offer paid parental leave, with the vast majority making paid leave equally available for both parents. The most common length of paid parental leave is between 7-12 weeks.  

Adoption leave  

If your employee plans to take parental leave to care for an adopted child, they are entitled to two days of unpaid pre-adoption leave to attend interviews and appointments. However, in these circumstances you can instead direct an employee to take another form of leave (e.g. paid annual leave).  

Adoptive parents are otherwise also eligible for the same parental leave entitlements as birth parents.  

Unpaid special parental leave   

Employees are eligible for special parental leave if they are: 

• Not fit for work because of a pregnancy-related illness.; or  

• If their pregnancy ends after (at least) 12 weeks because of miscarriage or termination.  

Hospitalised children 

An employee may wish to put their unpaid parental leave on hold if their baby has to stay in hospital after birth. This means they can return to work and recommence their unpaid leave when the baby is discharged from hospital.  

Miscarriage leave 

Under the FW Act, Australian employers are required to provide employees with two days of compassionate leave where an employee (or the employee's spouse or de facto partner) has experienced a miscarriage. Compassionate leave in these circumstances is paid in relation to permanent employees, and unpaid in relation to casual employees. 

Stillbirth leave 

Employees who experience a stillbirth or the death of a child during the first two years of life can take up to (or continue) 12 months of unpaid parental leave. However, they may wish to cancel their leave and return to work sooner. Please remember that in these circumstances you cannot ask your employee to return to work or cancel their unpaid leave on their behalf.  

My employee has requested flexible working hours. What do I need to know? 

Under the FW Act, employees are eligible to apply for flexible working arrangements if they have worked for at least 12 months and are: 

• The parent, or have responsibility for the care of a child who is school-aged or younger. 

• Pregnant.

• A carer (as defined in the Carer Recognition Act 2010). 

A request for flexible working arrangements must be in writing and set out the change sought and reasons for the change. 

Employers must provide the employee with a written response to the request within 21 days, stating whether the request is granted or refused. A request can only be refused on reasonable business grounds, which may include: 

• If the arrangement is too costly and not financially viable.  

• If it's impractical to change existing employees' arrangements or hire new employees to accommodate the request . 

• If it would detract from the employee’s ability to fulfil the requirements of their position (or their team’s effectiveness).  

• If it would result in a significant loss of productivity or have a negative impact on customer service. 

• If it would give rise to an unsafe work environment. 

• If it would be likely to have a significant negative impact on customer service.  

Note: Other categories of employees are also eligible to request flexible working arrangements under the FW Act, such as older employees (55 or older), and employees experiencing family and domestic violence (or employees who have a member of their immediate family experiencing family and domestic violence). You may want to consider accommodating flexible working arrangements for all workers, if practicable, in your business as a way of creating a culture of support.   

What are my work health and safety obligations?  

You have a legal obligation to provide, so far as is reasonably practicable, a safe work environment. This includes making allowances for expectant employees and parents returning to work after parental leave. 

Right to a safe job  

All pregnant employees (regardless of if they are entitled to parental leave under the FW Act or not) are entitled to move to a safe job if it is unsafe for them to do their normal job due to their pregnancy.  

If an employee needs to transfer to another job, you may ask them to provide a medical certificate stating they are fit for work, but that it is inadvisable for them to continue in their present position for a certain period (the risk period). For transfers to a safe job, you must abide by certain conditions. 

Employees who are transferred into a safe job will be paid for their full rate of pay for the position they were in before the transfer. Unless otherwise agreed, the safe job must have the same ordinary hours of work. 

Where the pregnant employee is unable to work their usual role and there are no appropriate safe jobs available, the employee is entitled to take no safe job leave for the relevant risk period. If the employee is entitled to unpaid parental leave under the FW Act, ‘no safe job leave’ will be paid. 

What are my keeping-in-touch obligations?  

Keeping in touch (KIT) days are designed to keep your employee connected to the workplace during their period of unpaid parental leave, and to facilitate an employee's return to work following their parental leave.   

Your employee can access up to 10 KIT days from when they become their child's carer until they return to work. You and your employee must agree to participate in a KIT day. And either of you can decide if you don't want the KIT activity to occur. 

It’s good to make the time to agree on a Keeping in Touch Plan with your employee before they go on leave.  

When can a KIT activity take place?  

• You can't ask your employee to participate in a KIT day within six weeks of the birth or adoption of their child.  

• Your employee can't access a KIT day within the first two weeks of the birth or adoption. 

• Your employee can request and participate in a KIT day that's more than two weeks (but less than six) after the birth or adoption as long as you both agree to the activity. 

What counts as a KIT day?  

• Attending team meetings.  

• Strategy sessions or days.  

• Company-wide meetings or announcements. 

• Inductions or meeting new team members.  

A KIT day doesn't have to mean working an eight-hour day. For example, if your employee comes into the office to attend a one-hour meeting, they are paid for one hour but that is considered one KIT day and counts toward their 10-day limit. Employees may choose to use KIT days in the lead-up to their return to ease into the transition and get back up to speed before their leave ends. The use of any KIT days needs to be mutually agreed upon with the employee and employer.  

My employee has suffered a pregnancy loss. What can I do?  

Losing a baby is a devastating experience that can have lasting repercussions. The Bureau of Statistics reports 282 miscarriages, five stillbirths and two infant deaths (under the age of 28 weeks) occur every day in Australia.  

Given the prevalence of pregnancy loss, employers and leaders need to be aware of the issue and mindful of how it can potentially affect employees. 

It can be easy to say the wrong thing, which can do emotional damage.  Be compassionate, know the difference between leave entitlements, check in with your employee (not immediately), and resist pressuring them to return to work before they are ready.   

• Review your parental leave policy 
  Does it include miscarriage or stillbirth leave? If you still need to write a parental leave policy, consider this a good time to get it underway. You want to avoid burdening your employee with unnecessary admin or make it hard for them to find out their entitlements at this time.  

• Consider investing in a Workplace Pregnancy Loss Support Program, or a good quality EAP service that can support grieving employees.  
  Providing access to psychological and confidential support can make a huge difference. Support of this kind can also extend to the partner of the employee.If you can’t stretch to this financially, let them know about other support services such as Red Nose Grief and Loss. 

• Show you care 
  Consider making a donation to the Stillbirth Foundation Australia or Pink Elephant Support Network (or a relevant charity) to show you care.  

For more, the Stillbirth Foundation Australia has employer resources to help.    

I'm not clear on pregnancy and parental leave discrimination laws. What do I need to know to protect my business?  

Perinatal discrimination is incredibly prevalent, with pregnancy overtaking disability as the top discrimination complaint in Australian workplaces.  

To protect your business, be mindful of taking unlawful actions against pregnant employees. These include:  

• Firing a pregnant employee or making them redundant while on parental leave, because they are pregnant or on parental leave.  

• Refusing pregnant employees opportunities for promotion or treating them differently because they are pregnant.  

• Forcing a pregnant employee to work in conditions that are unreasonable or unsafe. 

• Preventing them from using their legal entitlements, such as taking unpaid parental leave or returning to their role.  

• Changing an employee's job scope, such as reducing hours or responsibilities, because they are pregnant.  

• Refusing a flexible working request without reasonable business grounds.  

• Not allowing an employee to return to work after parental leave. 

Visit the Fair Work Ombudsman's website for more information about workplace and pregnancy discrimination.  

What are my obligations to employees hired to cover parental leave periods?  

If you have hired a replacement cover for your employee going on parental leave, you must make it clear in job advertisements and interviews that this is a temporary position.  

Under the FW Act, you must make it clear to a replacement employee that the employee on parental leave has a right to return to their old position. And that the employee and employer have a right to cancel or end parental leave early in some circumstances (for example, in the event of a stillbirth or infant death).  

Be wary of making promises to replacement employees about long-term future employment, as circumstances can quickly change, and you may expose yourself to other legal liability.   

Further support 

Download our kit for managers in small business to access the tools and information to help guide you through the parental leave journey. You can also use the Parent Journey Planner on the Parent Well to help navigate this transition well.  

Download the parental leave toolkit for managers