Impact of balanced paid parental leave policies might not be what you think

As a partner of a firm specialising in employment law, part of my mandate is to push best-practice workplace policies and their benefits in-house, here at Danny King Legal (DKL). That means we need to lead by example, constantly iterating and turning all the industry talk of work-life balance, resilience, and equal opportunity into a practical reality for our people.

I’m very humbled to be in this position of influence. Not only for the potential positive impact I’ve seen it have on everyone at DKL, our morale and performance, but having just returned from months of paid paternity leave, I’ve had some time to develop a perspective on the benefits and how they really can improve our relationship with the workplace.

Like any new parent, I had to navigate sleep deprivation, quickly develop new skills, and stress about things that were out of my control. If I didn’t have paternity leave, I would’ve had these same challenges, but it would’ve been on top of work challenges. No doubt, I would have missed so many irreplaceable moments with my family.

The impact of parental leave policies on employers and employees is significant. Today, mothers are better represented in the workforce than ever before, and fathers are often more actively involved. But we were starting from a low base, where we aren’t that far, historically speaking, from the expectation that women would be the ones to risk giving up their careers to be primary carers if a baby comes into the picture.

There’s still a lot to be done to make entitlements systems align with the flexibility parents need to enable capable professionals to celebrate an addition to the family in a meaningful and relevant way.

Parents groups are pushing the Australian government to increase parental leave from 18 to 26 weeks.

Proposed changes to paid parental leave

In the Federal Budget announcement handed down in October, the Australian Government proposed changes to the Paid Parental Leave Scheme. These changes signalled a move from the primary carer receiving 18 weeks of Parental Leave Pay, and the grim two weeks for Dad and Partner Pay, to a gender-neutral pool of 20 weeks from which any parent can claim.

The proposal also suggests that parents can take leave for as short as one day, take leave at the same time, and do so up to 2 years from the date of a child’s birth. All workers would be eligible. Each year from July 1, 2024, two weeks would be added to the 20 weeks until the pool reaches 26 weeks of coverage by 2026.

This proposed change better reflects the demands of modern parenting and a shift in policymaking at a government level and in the private sector too. More and more, organisations are implementing more flexible paid parental leave policies that recognise the value of encouraging a balanced contribution and a shared experience.

Three in five Australian employers offer parental leave, but only half of companies in male-dominated industries offer it, according to the Workplace Gender Equality Agency.

The impact of shifting parental leave norms

Sadly, parental leave is often handled by employers on the basis of statutory minimums, without any thought to the real-life impact on families or businesses.

The World Economic Forum’s latest gender gap report, which said it would take 132 years to close the gap globally, also noted that thriving economies are more often the ones that advance women’s career prospects after they become mothers.

It’s estimated that what’s known as the ’motherhood penalty’ results in around 80 per cent of that gender pay gap. Put simply, there’s a financial disadvantage to taking time out of the workforce, and women continue to bear a disproportionate amount of the burden.

Meanwhile, there’s evidence that if fathers take paternity leave, routines that lead to equal sharing of childcare and housework are more likely to emerge. There’s also a growing number of modern dads who want to be more involved with their newborns and don’t identify with outdated stereotypes of being the family’s breadwinner.

Paid parental leave policies that leave the door open for both parents to spend time with their children and advance their careers would benefit families and employers in the long run for myriad reasons. At DKL, we have adopted a gender-neutral and generous policy for qualifying employees with a minimum service requirement. That, in the absence of the yet-to-be-introduced government changes, allowed me to spend time with my child and work flexibly in conjunction with my wife’s leave.

Partners in law firms are rarely able to take extended time off, and I feel lucky to have had the opportunity. It will be fresh in my memory as I return to helping our employer clients establish or refine their parental leave and related policies, given the benefits that can ensue.

KPMG started offering 26 weeks of paid parental leave for mothers and fathers in 2021.

What should employers keep in mind?

At the very least, employers must be aware of the statutory parental-related obligations currently in place. Furthermore, short-changing or discriminating against your staff for parental-related issues should not be tolerated because your business is ill-informed or unprepared. Family among your employees is a fact of life — it’s something that employers should celebrate.

Beyond that, there’s the opportunity to meet the rising expectation for more generous and flexible policies for staff, which nowadays can be the differentiating factor that helps you find and retain top talent.

We work with clients to help them establish their policies, with particular attention to providing clarity around how the organisation manages paid leave. We recommend generous policies where the business can afford it, noting that flexibility can be perceived as more important than dollars. Opening up the conversation is the starting point.

It’s important to remember that just having a policy sitting on the shelf isn’t enough. It needs to be nested within a business plan to enable a smooth transition for employees to take parental leave, to maintain contact, and to return. The considerations include the practical side of work-related handovers through to managing the cultural impact and team morale, particularly in a smaller business setting.

Kevin Yee is a partner at Danny King Legal, a boutique employment law firm in Sydney.