There is almost a silent revolution happening across many countries of the world. Most countries are revisiting their parental leave legislations to ensure that parents get to spend as much time as possible with their infants without the fear of losing out on their organizational remuneration or scope for professional growth. From an organizational point of view, this transformation would mean implementing specific changes that ensure compliance with the amended legislations and planning to compensate for leave coverage. But from an end-to-end HCM solution point of view, this change reflects the need to create country-specific and flexible rules in the system.
Why is parental leave legislation an important aspect of Payroll?
Parental leave and employment laws differ vastly from country to country. Hence, organizations aiming at expanding their operations across the globe must, in addition to assessing other factors, take into consideration country-specific parental leave rights of their employees, since these regulations reflect the country’s policies regarding equality in the workplace.
For example, European countries consider paid maternity leave as an investment for their countries’ economies. Offering paid maternity leaves create job security for mothers, thereby promoting the economic growth of the country. Many countries are also recognizing the value of paternity leaves in ensuring satisfaction and personal growth of employees.
Let’s take a peek at some recent developments related to maternity and paternity leaves in some of the countries.
Country-specific changes in parental leave legislation
The Maternity Benefit (Amendment) Bill, 2016, includes amendments to specific provisions of the Maternity Benefit Act, 1961.
The key updates to the act include
- The duration of paid maternity leaves: increases to 26 weeks (from 12 weeks); however, a women with two or more surviving children is entitled to receive 12 weeks of paid maternity leave.
- Paid adoption leave: this category of leave is for 12 weeks from the date the child is handed over to the parent(s), provided the child is younger than 3 months.
- Crèche facilities at organizations: Organizations with 50 or more employees must organize crèche facilities with about 4 visits permitted to the mother per day.
As per the latest legislation, single mothers would soon be entitled to avail all the maternity leave benefits – including 16 weeks of statutory paid leave. These benefits were initially available only to legally married women. This change is expected to take effect from early 2017.
Other changes include
- The duration of legitimate paternity leave will increase to at least 2 weeks for fathers of children born on or after January 1, 2017.
- The duration of shared parental leave will be increased from 1 week to 4 weeks for parents of children born on or after July 1, 2017. Shared leave days will however be deducted from the mother’s maternity leave, and sharing is subject to her permission.
- The duration of paid leave for adoption will also increase from July 1, 2017 – from 4 weeks to 12 weeks (if child is younger than 1 year).
- The legislation also allows eligible adoptive fathers to share 4 weeks of their spouse’s adoption leave.
Ireland is among the last few countries of the European Union to adopt paternity leave. The Irish Parliament passed the Paternity Leave and Benefit Act, 2016, allowing fathers to avail 2 consecutive weeks of leave within 26 weeks of the birth or placement of the child (with effect from September 1, 2016). Employers are however not under obligation to pay their employees during the paternity leave.
As per the latest legislation, the benefits of paid paternity leave extend to many more categories of employees than earlier. Mothers are eligible to receive up to 18 weeks of payments instead of the standard 16 weeks.
The current U.S. policy does not mandate paid maternity leave. Hence parental leave regulations vary across the various cities and states of the country. High-end organizations do provide paid maternal leave packages.
In 2015, United Kingdom acknowledged the importance of encouraging broader parental leave policies and, with effect from April 2015, they introduced shared parental leave and pay.
This short overview of the diverse parental legislations across most of the countries of the world is proof of the extent of country-specific variances that organizations must consider and understand before expanding their operations.
Even within countries where they have already established their operations, organizations need to ensure that they are up to date on the latest amendments. They need to consider the repercussions of changes to maternity and paternity leaves on workforce management and employee budget forecast. They must also focus on the administrative aspects of managing revised legislations – for example, communicating the implications of such revised regulations before implementing the changes.
Ramco HCM offers multi-country payroll across 35+ countries, many of which have recently witnessed new developments or made amendments to parental acts (e.g., India, Singapore, and New Zealand). Dedicated resources at Ramco study and evaluate organizational impacts of new or changes to existing acts. We ensure that our Payroll software are up to date and compliant with the relevant legislations and regulatory requirements. These timely updates help organizations to focus on other operational aspects instead of worrying about potential changes required to comply with changing regulations.
Developing country-specific parental leave policies and monitoring compliance with local laws is indeed a herculean task, but with the right support, all the associated hurdles during implementation can be easily managed.