Almost 50,000 women have applied for the Federal Government’s Paid Parental Leave scheme, as small businesses prepare for their involvement in the regime from July.
Although the government-funded scheme commenced in January, employers haven’t been directly involved in the process because payments are currently administered by the Government.
However, as of July 1, employers will take on the role of paymaster, a move that has been met with hostility from business groups, which argue small business owners already have enough to contend with in the way of red tape.
On Mother’s Day, Families Minister Jenny Macklin said 48,286 workers have signed up for the benefit, suggesting the scheme isn’t as unpopular as initially predicted.
But Peter Strong, executive director of the Council of Small Business of Australia, says the scheme is still a setback for employers, arguing small business owners are already overwhelmed by their administrative duties.
“It is a very common approach by government to add to the complexity of a small business person’s life by adding red tape and compliance demands,” Strong says.
“The Government demands that we complete the BAS, collect and distribute superannuation, get involved in Paid Parental Leave, achieve unachievable OH&S demands, get ready for the likely impost of reporting for carbon usage, continually get our heads around changing workplace relations laws, deal with the stress associated with the lack of real-time information on wages and the list goes on.”
“Many people in business spend Sunday mornings doing the work of government. Many women in business will make dinner then get the kids to bed and then spend late weekday evenings doing the BAS or super or paid parental leave.”
Meanwhile, law firm Hall & Wilcox is urging employers to finalise their paid parental leave systems in the next two months to avoid penalties.
Breaches of the scheme may attract a maximum penalty of $6,600 for individuals and $33,000 for corporations.
“Parental leave payments will normally be paid in employers’ usual payroll cycles. These payments will need to be treated as salary and wages, and typical PAYG withholding arrangements will need to be adhered to,” Hall & Wilcox partner Alison Baker says.
“Employers will need to provide records of payments to employees, usually in the form of pay slips, and the payments should be included in annual payment summaries.”
“Employers should also keep for seven years written financial records of funding received from the Family Assistance Office and parental leave payments to employees.”
Baker says the right to parental leave pay under the scheme applies to all employees, the self-employed and independent contractors who meet the eligibility requirements.