Parental Leave

SmoothPay is one of very few (if any) payroll systems available in New Zealand to properly cater for Parental Leave.

We have a complete guide to Parental Leave available here

Quick Steps:

  1. Edit Employee..More..LWOP/Parental tab
  2. Set the leave type to Parental Leave and enter the start and return dates
  3. OK and Save

The employee will be regarded as being on Parental Leave for the period you set as well as the 12 month "shadow period" following return to work (see guide for details).

Any annual leave accrued during that period (including the shadow period)will be regarded as "leave accrued whilst on Parental Leave" and is subject to different valuation rules than those that apply to normal annual leave (the divisor used is 52 weeks regardless and can result in extremely low weekly values when such leave is consumed).

SmoothPay works all this out for you (as long as you are using compliant leave accrual methods) and the Assistant will display any unused leave accrued whilst on Parental Leave and it's average weekly value. When this has been used the valuation for annual leave will return to the usual rules.

There is also no need to edit any employee settings after return to work.

Recommendations:

We receive a lot of calls from employers where the employee has requested that leave be paid out "to date". Our advice to you is DON'T!

The employee's leave entitlement is the balance remaining unused from accruals to their last anniversary (if any). By all means, pay out that balance before the employee leaves (or even after they have gone on Parental Leave, though supposedly the employee is not meant to earn anything in their initial paid leave period).

You should not pay out a termination value or an "accrued to date" value, as the Holidays Act requires that you pay such leave at current or average "best" weekly rates, yet the employee's actual leave value will very likely be worth a lot less when accrued and consumed correctly - you risk significantly overpaying your employee if pay leave in advance. However, it's your choice.

 

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