Businesses will have to act as bankers in administering the Federal Government’s paid parental leave scheme if hidden costs are not ironed out, according to Peter Anderson, CEO, Australian Chamber of Commerce and Industry (ACCI).
Although the $731 million paid parental leave scheme has been welcomed by employer industry groups, the administration costs which will be borne by employers could outweigh some of the benefits.
“As a principal the government should not ask the private sector to administer a scheme without attending to and limiting all of the administration costs,” said Anderson.
Although he did not expect the Government to address all the issues on budget night, he said the State Government will need to assist small businesses by the time implementation of the scheme comes around in 2011.
“Payments of maternity leave provided by an employer could attract higher workers compensation premiums or higher payroll tax,” he said.
“In those circumstances, what’s required is for State Governments to provide some exemptions to those employers providing maternity leave.”
The Government scheme will be available to parents for births and adoptions that occur on or after 1 January 2011 and will provide 18 weeks postnatal leave paid at the federal minimum wage (currently $543.78 per week).
“Paid parental leave is an area that offers some opportunities for employers,” said Ken Gilbert, head of Mercer’s human capital business.
“HR has an opportunity to play a role here, and we are likely to see more people taking parental leave. Employers can engage with them to ensure that they have the skills and capabilities they need in the interim as well as when those taking parental leave do return to work.”