Does An Employer Have To Pay Maternity Leave In Australia?

Welcoming a new child is an exciting time, and as a business owner or manager, it also raises practical questions about leave, payroll and compliance.

One of the most common is simple: do employers have to pay maternity leave in Australia? The short answer is no - not as a general legal requirement - but there’s more to it once you factor in government payments, workplace policies and the rules around unpaid parental leave.

In this guide, we’ll unpack what the law requires, how the current government Paid Parental Leave (PPL) scheme works in 2024 and beyond, and what you should have in place to support your people and stay compliant.

What Is Maternity Leave In Australia?

Under Australian law, “maternity leave” sits under the broader concept of parental leave. It’s time away from work to care for a newborn or newly adopted child and to support that early transition to parenthood.

The National Employment Standards (NES) in the Fair Work Act set the minimum entitlements. Eligible employees can take up to 12 months of unpaid parental leave, with a right to request a further 12 months (so up to 24 months in total). This applies to most full-time and part-time employees and, in many cases, long-term regular casuals.

It’s important to separate two ideas:

• Unpaid parental leave: a workplace entitlement under the NES, provided by the employer (time away from work, without pay).
• Paid Parental Leave (PPL): a government payment administered by Services Australia, which is separate from any employer-provided paid leave.

Do Employers Have To Pay Maternity Leave?

As a general rule, employers in Australia are not legally required to pay for maternity leave. The NES requires you to provide unpaid parental leave if your employee meets the eligibility criteria, but there is no universal obligation to offer employer-funded paid parental leave.

When Is Employer-Paid Leave Required?

Employer-funded paid parental leave becomes a legal obligation only if you’ve promised it elsewhere - for example in an Employment Contract, an enterprise agreement or a written policy. If your documents say employees get a certain amount of paid parental leave, you must honour that entitlement.

Many businesses choose to offer paid parental leave as a benefit to attract and retain talent. If you go down that path, make sure the terms are clear and consistent with your other policies so there’s no confusion about eligibility, how payments are calculated and how it interacts with government PPL.

Is Employer Administration Of Government PPL Mandatory?

Not always. Services Australia can pay employees directly under the government scheme. In some cases, Services Australia will ask an employer to deliver the payments through payroll (after Services Australia funds you). If that happens, you’re passing through government money - you’re not out of pocket for the PPL component. If you’re not asked to administer, Services Australia pays the employee directly.

How The Government Paid Parental Leave Scheme Works (2024 Update)

The government’s Paid Parental Leave scheme has been updated and continues to evolve. Here are the key points you need to know now:

• Duration and rate: From 1 July 2024, eligible families can access up to 22 weeks of Parental Leave Pay at the National Minimum Wage. The entitlement is legislated to increase over time, with further weeks being added until it reaches 26 weeks by July 2026.
• Who can receive it: The payment is gender-neutral and shareable between parents. The “Dad and Partner Pay” has been rolled into this unified scheme, providing more flexibility to families.
• Payment delivery: Services Australia pays the entitlement. Depending on circumstances, it may be paid directly to the employee or routed via the employer’s payroll (with Services Australia funding the employer first).
• Eligibility: Employees must meet work history, income and residency tests. This can include full-time, part-time, casual and self-employed workers who meet the criteria.

Government PPL is separate from NES unpaid parental leave. An employee can receive PPL even if they don’t qualify for NES unpaid parental leave, provided they meet Services Australia’s criteria and the “not working during the PPL period” rules (subject to limited exceptions like Keeping in Touch days).

How Maternity Leave Works In Practice For Employers

Let’s look at a typical timeline so you can plan coverage and compliance with confidence.

1) Notice And Evidence

• Employees need to provide at least 10 weeks’ written notice before starting unpaid parental leave and confirm the start and end dates at least 4 weeks before leave begins (or as soon as reasonably practicable if plans change).
• You’re entitled to request evidence (for example, a medical certificate) to support the leave dates or pregnancy-related adjustments.

2) Unpaid Leave Period

• Eligible employees can take up to 12 months’ unpaid parental leave. They can then request an extension of up to a further 12 months (total up to 24 months).
• If they request an extension, you must respond in writing within 21 days. You can refuse only on reasonable business grounds, and you must set out those reasons in your response.

3) Government PPL Payments

• If Services Australia asks you to deliver the PPL payments via payroll, you’ll receive the funds first and then pass them to the employee through your normal pay cycle. Otherwise, Services Australia will pay the employee directly.
• Government PPL does not replace your obligations under the NES (e.g. job protection and return to work rights). It operates alongside them.

4) Employer-Paid Parental Leave (If You Offer It)

• If your business provides an employer-funded paid parental leave benefit, follow your stated rules on eligibility, duration, pay rates and any superannuation treatment. Keep this clearly set out in your Parental Leave Policy and contracts to avoid misunderstandings.
• Make sure you explain to employees how any employer-funded leave interacts with government PPL (e.g. whether it’s paid concurrently or top-up, and how it affects timing).

5) Keeping In Touch (KIT) Days

• Employees can work up to 10 Keeping in Touch days during parental leave (by agreement). These days help maintain connection and support smoother return-to-work planning.
• KIT days are paid by the employer at the normal rate and don’t usually affect eligibility for government PPL, provided the rules around timing and the cap are observed.

6) Maternity Leave Cover

Plan early for business continuity. Common options include:

• Hiring a fixed-term or casual replacement with a clear end date in the contract (e.g. a 12-month term tied to the return of the incumbent).
• Redistributing duties among the existing team if the workload allows.
• Engaging a contractor or temp for peak periods or specialised tasks.

Whatever you choose, make sure you use clear documentation - for example, a tailored Employment Contract for casuals or a fixed-term agreement for temporary cover - so everyone understands the arrangement.

What Are Your Legal Obligations As An Employer?

Beyond the pay question, employers have several important legal duties during parental leave.

Unpaid Parental Leave And Eligibility

• Grant unpaid parental leave to eligible employees with at least 12 months’ continuous service (includes certain long-term regular casuals).
• Follow the notice and evidence requirements and consider requests for an extension in good faith within the 21-day response window.

Job Protection And Return-To-Work

• Employees are entitled to return to their pre-leave position. If that role no longer exists, they must return to an available position that is nearest in status and pay to their old job.
• Don’t make an employee redundant or alter their role detrimentally because they took parental leave. If a genuine redundancy occurs, you must follow proper process and consult as required.

Safe Job And Special Maternity Leave

• If it’s unsafe for a pregnant employee to do their usual job, you may need to transfer them to a safe job with no loss of pay. If no safe job exists, they may be entitled to paid or unpaid “no safe job” leave, depending on the circumstances.
• Unpaid special maternity leave may apply if the employee has a pregnancy-related illness or a miscarriage; this is separate from the main parental leave entitlement.

Non-Discrimination And Fair Treatment

• Don’t treat employees unfavourably because they are pregnant, planning parental leave or receiving PPL. Decisions must be free from discrimination and in line with your equal opportunity policies.
• Communicate respectfully and avoid any pressure to return to work early. Discussions about Keeping in Touch days or flexible arrangements should be employee-led.

Policies, Contracts And Records

• Ensure your Workplace Policy suite and staff handbook set expectations clearly, including parental leave, discrimination, and flexible work practices.
• Use up-to-date contracts for permanent, part-time and casual staff to align with your leave practices, payroll and return-to-work arrangements.
• Handle medical information sensitively and store it securely in line with your Privacy Policy.

What Documents Should You Have In Place?

Clear, practical documents make parental leave smoother for everyone and reduce legal risk. At a minimum, consider the following.

• Employment Contract: Sets out leave entitlements, the process for applying for parental leave, and any employer-funded paid leave your business offers.
• Parental Leave Policy: Explains eligibility, notice and evidence requirements, extensions, Keeping in Touch days and how government PPL interacts with your workplace practices. A well-drafted Parental Leave Policy gives everyone certainty.
• Workplace Policies/Handbook: A central document housing your leave, discrimination, bullying and flexible work policies. Keeping these consistent avoids mixed messages. Sprintlaw’s staff handbook approach keeps key policies in one place.
• Privacy Policy: Covers how you collect, store and use employee personal information (including medical certificates). Link this to your HR practices and access controls. You can align this with your broader Privacy Policy for staff and customers.
• Fixed-Term/Casual Contracts For Cover: If you hire maternity leave cover, use a fixed-term or casual agreement with clear start and end dates and a handover plan.
• Return-To-Work Plan: Not a formal legal document, but a written plan for handover, flexible hours and phased return can make re-entry smoother and reduce misunderstandings.

If you’re unsure how these documents should fit together for your size and industry, a quick chat with an employment lawyer can help you set a consistent framework that’s easy to follow.

FAQs: Everyday Questions From Employers

Do Employees Have To Take 12 Months Off?

No. They can take less than 12 months. Some employees take a shorter period and then negotiate part-time hours or flexible work after returning.

Can I Refuse Unpaid Parental Leave?

If the employee is eligible under the NES, you cannot refuse the initial 12 months. For an extension request up to a further 12 months, you can refuse on reasonable business grounds - but you must respond in writing within 21 days and outline those reasons.

Can Someone Work While Receiving PPL?

Generally no, but Keeping in Touch days are a limited exception. These days are designed to maintain connection and do not usually affect government PPL if used correctly.

Do I Have To Pay Super On Paid Parental Leave?

There’s no universal rule requiring employers to pay super on government PPL. Whether you pay super on any employer-funded parental leave depends on your policy, contract or industrial instrument, and how the payment is structured. Get specific advice before finalising your approach.

Are Small Business Owners Or Self-Employed People Eligible For PPL?

Yes - provided they meet Services Australia’s eligibility tests. Self-employed parents can receive government PPL even if they don’t have an employer to administer the payment. Plan ahead for business continuity (reduced hours, contractor support or temporary closure) during your leave period.

Key Takeaways

• Employers in Australia must provide eligible employees with unpaid parental leave under the NES but are not legally required to fund paid maternity leave unless it’s promised in a contract, policy or agreement.
• The government’s Paid Parental Leave scheme is currently 22 weeks from July 2024 (rising to 26 weeks by July 2026) and is paid by Services Australia, either directly to the employee or via the employer’s payroll when requested.
• If an employee requests to extend unpaid parental leave beyond 12 months, you must respond in writing within 21 days and may refuse only on reasonable business grounds.
• Employees have job protection and the right to return to their role (or a comparable role). Plan maternity leave cover early using clear fixed-term or casual contracts and a structured handover.
• Keep your Employment Contracts, Parental Leave Policy and workplace policies up to date, and handle personal information in line with your Privacy Policy.
• Use Keeping in Touch days to maintain engagement during leave, but avoid pressuring employees to return earlier than they wish.
• If you’re introducing employer-funded paid parental leave, document eligibility, pay rates, superannuation treatment and how it interacts with government PPL to avoid disputes.

If you’d like a consultation on your maternity and parental leave obligations, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.