Paid maternity leave can benefit small business

The paid maternity leave scheme recommended by NFAW to the Productivity Commission will put small business on an equal footing with large organisations. The proposed scheme provides all employees with 28 weeks paid parental leave and 4 weeks paid paternity leave paid through a fund made up of a government contribution and a pooled levy on all employers of less than 1 per cent of labour costs.

Small to medium enterprises are at a disadvantage compared to Governments and big businesses in recruiting staff in a tight labor market when it comes to the attractiveness of remuneration packages they are able to offer.  This disadvantage will continue if the government introduces a scheme that requires employers to replace all, or part, of the income of women on paid maternity leave.

The Federal Productivity Commission's enquiry into paid parental leave means it now seems possible that in the next year or two there will be a universal paid maternity leave scheme in place in Australia, and that paid maternity leave will be funded either by Government or jointly by government and employers.

Julia Perry and Marie Coleman of the NFAW recently wrote in the Canberra Times that "Seventy per cent of Australian mothers are in paid work before they give birth. Estimates vary on how many have access to paid maternity leave, but we know that paid maternity leave is one way that Governments and big business can position themselves as employers of choice in a tight labour market."

"So far the Rudd Government has said little about its position on the issue beyond setting up the inquiry with guidelines to examine the economic and social costs and benefits of paid parental leave."

"But a clue was provided this week when Woolworths decided to offer paid leave to its permanent female employees in Australia. Deputy Prime Minister Julia Gillard welcomed the decision but added in a statement to The Age: 'The Productivity Commission will report to Government in February with options that won't impact adversely on business, particularly small business.'"

"Any scheme that required employers to pay directly when an employee takes paid maternity leave would have a serious impact on small business and on industries with a high percentage of women. Although only about 2 per cent of employees take maternity leave in a particular year, if that occurs in a business employing only 2 or 3 staff, it would impose a high additional staff cost in that year."

"The risk of that happening would make small employers think twice about employing female staff."

"A scheme that we have proposed would minimise the impact on small business and female industries. This scheme provides 28 weeks paid parental leave and 4 weeks paid paternity leave, paid through a fund made up of a government contribution and a pooled levy on all employers of less than 1 per cent of labour costs."

"Furthermore, the cost to employers of recruiting a temporary replacement or backfilling the position would be addressed by a lump sum payment to the employer equal to 4 weeks of the mother's ordinary wages. This addresses a need that exists now when women take unpaid leave."

"This proposal recognises the difficulties for small business in recruiting and retaining female employees in a tight labour market, where large employers and Government can out-compete them by offering paid maternity leave. It would create a level playing field, because the burden would be shared equitably across all employers."

Further inquiries
Julia Perry 0418 404 201 Marie Coleman 041 4483 067