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The Employer’s Guide to Parental Leave

Key Takeaways

1. Parental leave can be an umbrella term to describe maternity, paternity, and adoption leave. It can also be used to describe a separate employee entitlement in its own right for parents more generally.

2. Parental leave as a separate entitlement is generally for either parent to take time off to care for newborn or adopted children.

3. Depending on the country in which a company is operating, employees may be entitled to paid or unpaid parental leave and may be allowed a certain number of days off to care for children. 

4. It is important for companies to be aware of parental leave so that employees are receiving the correct entitlements and to ensure that as an employer, they are complying with the law.

In short, parental leave is in place to allow parents to be able to spend time caring for their children (whether newborn or adopted) without having to give up their job to do so.

The laws surrounding parental leave vary in different countries which can make it difficult for companies that are operating internationally to keep up. For instance, in some countries, parental leave is paid and in others it is unpaid. The time that an employee can have off work for parental leave also tends to differ depending on the jurisdiction.

It is beneficial for employers to understand parental leave. It is important to know about the different employee entitlements both mandatory and non-mandatory, not only to comply with laws around the world, but also to ensure that employees are getting what they are entitled to. This can help to support staff well-being which can have an overall impact on productivity in the workplace.

What is parental leave?

Parental leave is available in most countries and is a term that is often used in some places to include maternity, paternity, and adoption leave, but it can also be a separate employee entitlement in its own right in other countries. Parental leave is an employee benefit, distinct from other leave benefits such as annual leave and sick leave,  and the rules surrounding it can vary depending on the jurisdiction.

Some parental leave can be paid, which means that when the employee is on leave, their salary is either reduced or not affected. Some companies offer extra paid family leave entitlement as a non-mandatory benefit or offer to pay half of the worker’s salary if they take longer time off. Unpaid leave means that the employee will not be earning while they are off work.

Types of family leave include the following:

  • Parental leave is the time either parent can take off after the birth of a child or adoption
  • Maternity leave is the time that a mother takes before and/or after the birth of her child. This is a mandatory benefit in many countries
  • Paternity leave is the time off from work that a father can take after the birth of his child. This is a mandatory benefit in many countries
  • Adoption leave is the time off from work that parents can take when they have adopted a child. This is a mandatory benefit in many countries.

Parental leave entitlements around the world

USA

In the USA, federal employees are entitled to paid parental leave of up to 12 weeks during the 12-month period starting from the date of birth of the child or the date of placement of the adopted child. The employee must have been working for the employer for at least 12 weeks to be entitled to it. There are also a range of state-based schemes. 

Note, there is no universal right to paid parental leave in the United States. 

There is a universal right to unpaid leave of up to 12 weeks. However, there are considerable limitations on this, including that it is only required of businesses with 50 or more employees within a 75-mile radius.  

Canada

In Canada, employees are entitled to maternity and parental benefits. Parental benefits are available to a newborn or adopted child. Employees have the choice between getting standard parental leave or extended parental leave. Standard parental leave gives parents up to 40 weeks off (one parent cannot take more than 35 weeks of standard benefits) and they will be paid 55% benefit rate. Extended parental leave allows parents up to 69 weeks off (one parent cannot receive more than 61 weeks of extended benefits) and will have 33% benefit rate.

UK

In the UK, parents can take unpaid parental leave to care for their children and are entitled to 18 weeks for each child and adopted child until they reach the age of 18. This is separate from maternity and paternity leave which are paid entitlements. Parents are limited to 4 weeks of leave in one year unless they agree with their employer otherwise.

Not everyone is entitled to this benefit in the UK. In fact, employees have to have been working for their employer for at least one year to get parental leave and must have parental responsibility for the child.

In order for employees to be able to take parental leave, they will need to give 21 days of notice to their employer indicating when they intend to take the leave and when they will return to work.

Read more in our Employer’s Guide to Employee Benefits in the UK

Ireland

In Ireland, it is called “parent’s leave” and allows each parent to take 5 weeks of leave for the first 2 years of the child’s life or if the child is adopted, leave can be taken within 2 years of the placement of the child. As of July 2022, parent’s leave is due to increase to 7 weeks.

In Ireland, the difference between parent’s leave and maternity leave is that parents are able to take up to 26 weeks off for maternity, and for paternity leave, 2 weeks off.

Australia

In Australia, the term “parental leave” is used to describe maternity, paternity, and adoption leave generally. Employees are entitled to up to 12 months of unpaid parental leave but they must have worked for their employer for at least 12 months.

There is also a guaranteed 18 weeks of paid parental leave for the primary carer, paid at the rate of the minimum wage. 

Spain

In Spain, the terms “maternity leave” and “paternity leave” are used. Maternity leave is guaranteed for a minimum 6 weeks after birth, with an additional 10 weeks within 12 months of the child’s birth, for a total of 16 weeks maternity leave guaranteed. There is an additional 2 weeks offered if there are complications during childbirth. In Spain, paternity leave is treated the same.

How can a global PEO help manage parental leave (and other types of leave)

Managing parental leave and other types of mandatory and non-mandatory benefits in multiple locations around the world can be difficult as the rules vary depending on the jurisdiction.

Not administering the correct employee entitlements can have a number of consequences for the organization: As a worst-case scenario, it can result in backpay awards, fines and other penalties if the employer is found to be non-compliant with regulatory and legislative requirements. It can also result in staff losing their confidence and trust in you as a credible employer. On the flip side, if you provide more than the required entitlements unintentionally, it can mean that the organization is disadvantaged financially.

A good solution to this is to instruct a global PEO to hire workers internationally on your behalf and to handle the legal, HR, and tax requirements, to ensure guaranteed compliance.

Handling international regulations and recruitment alone can be time-consuming, costly, complex, and can subsequently cause delays in hiring the right people and making sure that the correct mandatory and non-mandatory benefits are in place.

A global PEO will recruit and hire staff on behalf of the client company so that the worker can begin work immediately in full compliance with legal and payroll requirements. 

A global PEO can even help manage unlimited leave provisions

Horizons Manages Parental Leave and Other Benefits

If your company is looking to expand internationally, Horizons can support you by ensuring that the correct mandatory and non-mandatory benefits are in place, including parental leave.

At Horizons, we help global organizations manage leave and benefit entitlements for their employees in order to ensure they are remaining compliant with local laws and following the correct procedures. This can be an ideal solution for organizations that are unfamiliar with certain jurisdictions.

If you need assistance, please do not hesitate to contact us today for further information on how we can help you.

Frequently Asked Questions (FAQ)

Parental leave is an employee benefit and is available in most countries. The term parental leave can be used to mean maternity, paternity, and adoption leave collectively or it can mean parental leave as a separate employee entitlement or benefit distinct from the other types of parent/family leave.

The length of paid parental leave is dependent on the country in which an employee is working and whether the country offers paid or unpaid leave. Not all jurisdictions require employees to be paid when they take parental leave. Different countries have different rules and requirements on how long an employer can offer time off. 

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