As government reforms hit a hard stop at 26 weeks, Australian HR leaders face a defining moment
Australian HR leaders are entering a pivotal year for parental leave and family-friendly policy, with government reforms reaching a hard stop, employers reshaping entitlements, and growing pressure to reposition “care” as a core business strategy rather than a “nice to have” benefit.
That is the central message from Emma Walsh, CEO and founder of Parents At Work, whose organisation certifies family‑friendly workplaces in partnership with UNICEF Australia and tracks employer policy trends across Australia.
For HR executives, the implications extend well beyond compliance into talent, performance and long‑term brand value.
Government legislation: 26 weeks and then an “abyss”
Over the past three years, the federal government has been incrementally expanding the Commonwealth Paid Parental Leave scheme. The final scheduled step lands in July 2026, when the entitlement increases again and reaches 26 weeks, paid at the minimum wage. After that, there is no roadmap for further reform currently tabled.
Walsh describes the post‑July environment as an “abyss”. Prior to this, for more than a decade, parental leave policy settings were effectively frozen, and her concern is that without a clear forward plan, Australia risks drifting into another lost decade on parental leave reform.
This matters because Australia is already lagging behind comparable economies. According to the OECD, the **average total paid parental leave entitlement across member countries is around 52.7 weeks, when paid maternity, parental and home-care leave are combined. By contrast, Australia will offer 26 weeks, effectively half the OECD average duration, and at the minimum wage.
Countries such as Canada, France, Sweden, Iceland and Japan provide families with significantly longer periods of paid leave, often close to – or exceeding – a full year, supported through national policy settings designed to promote child wellbeing, workforce attachment and gender equality.
In response, Walsh and sector allies are preparing a renewed policy push that will play out over 2026 and beyond. Walsh wants to see a national move to 52 weeks of paid parental leave, with responsibility shared between government and employers rather than sitting predominantly with families.
Alongside that, tax reform and fiscal incentives that reward organisations which invest directly in paid parental leave, for example by offering offsets or deductions to employers who top up or fund extended leave.
For HR leaders, the message is that the statutory scheme is increasingly a floor rather than a ceiling. In a world where public policy has stalled at 26 weeks, it will be employer‑led initiatives that differentiate organisations in the eyes of current and future employees.
Employer policy trends: from labels to lived experience
One of the clearest trends is the removal of “primary” and “secondary” carer labels from employer schemes. Walsh explained that these labels have long been a target for reform because they force families into an artificial decision about which parent will be recognised as the primary carer and which will accept a secondary role.
In practice, this structure tends to drive the higher earner – still frequently the father – towards the shorter entitlement, while signalling that “secondary carers” are less important by granting them only minimal leave. Over time, this entrenches uneven caregiving and career patterns.
By contrast, the emerging norm is to design gender‑neutral schemes that avoid those labels entirely. Walsh stressed that in most dual-parent households, both parents have primary caregiving responsibilities and want to share the care, and policies should recognise that reality rather than locking families into outdated assumptions.
Alongside this structural shift, Walsh reported that employer‑funded paid parental leave is once again trending upwards. Workplace Gender Equality Agency’s most recent data reports the proportion of Australian employers offering paid parental leave (in addition to government entitlements) has continued to increase, and more organisations are adopting gender-neutral and more generous parental leave policies. Around 68 % of employers now report offering paid parental leave beyond statutory government schemes.
Equally important is what happens when employees come back. Walsh highlighted a growing focus on return‑to‑work design. Progressive employers are building in gradual return options – such as temporarily reduced hours or days that ramp up over time – and placing much greater emphasis on flexible work that enables parents to manage school hours, medical appointments and other caregiving duties.
True best practice now extends beyond just leave to the overall experience of leaving and re‑entering the workplace.
The business case: from empathy to performance and brand
While the social and equity arguments for family‑friendly policies are well understood, business performance is another key benefit. In Walsh’s words, it is as much a business issue as it is a family wellbeing issue.
Organisations that fail to offer meaningful parental leave and family support are paying a price. Employers without parental leave often experience attrition, particularly among younger women who are looking to start families and simply do not see a future in an organisation that will not support that part of their lives.
The pandemic has only amplified this. Employees have recalibrated what they are willing to tolerate at work and are placing far greater emphasis on happiness, wellbeing and value alignment.
At a fundamental level, people want to work for employers who care about their work–life wellbeing and acknowledge that they have obligations and relationships outside the office.
If organisations want the best from their people, they must remove obstacles that prevent employees from being at their best, Walsh said.
One of the most significant obstacles is unmanaged caregiving pressure. By using flexible work and family‑supportive policies to ease that pressure, leaders create the conditions for employees to be fully engaged and productive.
For HR leaders, this underlines that family‑friendly practice now reaches into talent attraction, retention, engagement and long‑term employer reputation.
Designing effective, future‑fit policies: priorities for HR leaders
In 2026 and beyond, organisations will need to move beyond a compliance mindset. With federal leave plateauing at 26 weeks, those seeking to be employers of choice should treat the government scheme as the starting point, not the destination.
Modelling a world in which Australian policy eventually matches the 52‑week OECD norm can help boards and executives understand what co‑funded arrangements between government and employers might look like and what that would mean for workforce planning and budgets.
Removing structural bias from policy design is now a hallmark of best practice, said Walsh. That includes scrapping primary and secondary carer labels and replacing them with gender‑neutral entitlements that give all parents genuine access to meaningful leave.
Policies that explicitly encourage fathers and non‑birthing parents to take extended leave help redistribute care, reduce long‑term gender gaps and shift cultural norms about who is expected to step back from work.
HR leaders should focus as carefully on the return as on the leave itself. Gradual return‑to‑work arrangements, thoughtfully structured flexible work options and manager capability building are essential to ensuring that returning parents re‑enter roles where they can continue to grow rather than stall.
Parents At Work’s data collection increasingly looks at how many employers offer coaching and planned, staged returns as part of their family policy architecture, and these features are fast becoming part of what “good” looks like.
Finally, culture must align with policy. HR leaders are paying closer attention to real‑world uptake and experience: who is taking leave, who is not, how people feel about using flexible work, and whether parents believe their careers will be affected.
Walsh observes that some of the most progressive organisations are those that now treat cultural safety around leave and caregiving as seriously as they treat the financial cost of entitlements, recognising that formal policies have limited impact if employees feel they will be judged for using them.
The road ahead for HR
Walsh’s overarching message is that parental leave and family‑friendly practice now sit squarely in the strategic domain. They shape who joins, who stays, who progresses and how an organisation is spoken about around the barbecue and at the dinner table. Employees increasingly seek employers that allow them to live the kind of life they want, balancing work and care in ways that feel sustainable.
With public policy stalled at 26 weeks minimum wage, the organisations that will lead in 2026 and beyond are those that treat parental leave as an investment in capability, design for all genders and all caregivers, focus on the lived experience of both taking and returning from leave, and foster cultures where care and career can genuinely coexist.
