Get your business ready for the new parental leave laws

By By Rob Cooper, tax expert at Sage

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With South Africa’s new parental leave laws having been promulgated, but only likely to take effect at some stage in 2020, employers that have not yet done so should fast-track their efforts to comply with the new legislation.

These laws not only grant dedicated leave days to new fathers, but also to new adoptive parents of children younger than two and commissioning parents with agreements with surrogate mothers.

The new laws are enacted though the Labour Laws Amendment Act, which adds three new leave types to the Basic Conditions of Employment Act (BCEA). Let’s take a closer look:

  • Parental Leave

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Fathers are now legally entitled to take 10 consecutive days of ‘parental leave’ following the birth of a child, provided their name is on the child’s birth certificate. At the same time, the birth of a child is removed from the events listed in BCEA section 27 that justify an application for Family Responsibility Leave.

  • Adoption Leave

The new legislation also grants 10 consecutive weeks of ‘adoption leave’ for an employee who is one of the adopting parents of a child below the age of two. If the adoption order applies to two adoptive parents, one may apply for 10 weeks of adoption leave and the other for 10 days of parental leave, with the decision left in the hands of the parents.

This could be open to abuse if the two adoptive parents work for different employers and both apply for 10 weeks of adoption leave.  It remains to be seen if the Unemployment Insurance Fund (UIF) will be able to detect this abuse when the two parties submit their benefit applications.

  • Commissioning parental leave

An employee who is a ‘commissioning’ parent in a surrogate motherhood agreement is entitled to 10 consecutive weeks of ‘commissioning parental leave’. As is the case with adoption, one parent may apply for 10 weeks of commissioning leave and the other for 10 days of parental leave when there are two commissioning parents in the surrogate motherhood agreement. There is the same potential for abuse as there is in adoptive parental leave if both parents apply for 10 weeks of commissioning leave.

New Benefit Types

The Unemployment Insurance Act was amended through the Labour Laws Amendment Act to provide that the Fund pays a benefit for 10 consecutive days of parental leave and for 10 consecutive weeks of adoption and commissioning leave.

The benefit value for parental, adoption and commissioning leave will be calculated at a fixed rate of 66% of the ‘earnings’ of the beneficiary subject to the monthly UIF limit. Rather than the UIF, the company paid for the three days of family responsibility leave for fathers when used as parental leave.

As is the case with maternity leave and maternity benefits:

  • The credit days that a contributor is entitled to may not be reduced by the payment of a benefit in respect of parental, adoption and commissioning leave; and
  • The payment of parental benefits, adoption benefits or commissioning parental benefits may not affect the payment of other unemployment benefits.

Getting ready for the new law

The implementation of the new laws is imminent, following a delay to give the UIF the time it needs to get regulations, paperwork and processes in place to support claims for the new leave benefits. Companies may not have much time to relook their employment contracts and leave policies and align them with the new laws.

Here are some tips for preparing for this shift:

  • In the period before the new requirements become effective, it will be the safer to continue to grant new fathers the three days of company-paid Family Responsibility Leave.
  • Ensure payroll and HR teams are able to advise employees about the new benefits and are prepared to support them with their UIF claims as soon as the details become available.
  • Send out a circular to inform colleagues about the new laws and their new leave entitlements.
  • Amend employment contracts to align them with the new legislation if the company currently offers less generous parental leave than the new laws prescribe.
  • Check that your payroll system supplier is ready to change its payroll system to provide for the new types of leave.
  • Ensure that leave application forms and employee self-service portals provide for employees to apply for the new types of parental leave.

At the time of writing, the Minister of Employment and Labour had not yet announced a commencement date for the new law. Companies should keep an eye on the press for this announcement, which is expected during 2020.

 


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