The working world has diversified a lot in the past decade. More women and LGTBQ+ people have entered the workplace and are moving up the career ladder.
Part of this positive shift means that businesses need a more inclusive parental leave package. It’s no longer just assumed that the mother will be the one stepping away from their job. Modern parental leave must factor in a variety of arrangements including ones where the father takes leave, same-sex couples, adoption, and surrogacy.
In this article we’ll walk you through the types of parental leave policies in Canada, how they work, and why it’s so important to educate employees on your parental leave policy.
Who Qualifies for Maternity and Parental Leave?
An employee can start receiving maternity benefits 12 weeks before their due date. Their benefits stop on the date they give birth or 17 weeks after their due date, whichever is later. An employee must be pregnant to qualify for maternity leave. If an employee is adopting a child or working with a surrogate, they do not qualify for maternity leave (though the surrogate does).
According to the Government of Canada, any parent caring for their newborn or newly adopted child qualifies for parental benefits as long as they meet the following requirements:
Their regular weekly earnings have decreased by more than 40% for at least 1 week.
They’ve accumulated enough insured hours of work in the previous 52 weeks.
After September 24, 2022 employees must have required at least 600 insured hours (was 420 previously).
Types of Parental Leave Policies in Canada
At a high level, parental leave in Canada is pretty straightforward. Parents may choose between two options:
Standard parental benefits
Extended parental benefits
The difference between choices determines the number of weeks of the leave and the weekly amount of money employees will receive. The standard parental leave is 40, but one parent cannot take more than 35 weeks of leave. Extended parental leave is 69 weeks, but one parent cannot take more than 61 weeks of leave. The option for parental leave to be split between parents allows for both people to spend time with their newly born or adopted child.
Though not all weeks of the leave must be taken consecutively, they must be taken within a specific timeframe. Standard parental leave must be taken within 52 weeks of the employee’s child being born or adopted. Extended must be taken within 78 weeks.
Finally, the amount of money employees receive each week is adjusted by the length of the leave. Employees taking standard parental leave may receive 55% of their salary with a weekly maximum of $638. Employees on extended parental leave may receive 33% of their salary with a weekly maximum of $383.
It’s important for employees to carefully consider which benefit option is right for them. Once a payment plan has been made, it cannot be changed.
Now it’s no secret that the cost of living is quite high these days. For many employees, having their income cut to just 55% of their usual earnings may cause additional stress at a time when they are already under a lot of pressure. Some employers may decide to offer to top-up the salary of their employees on parental leave so they receive 75% to 90% of their full salary.
The Importance of Educating Your Employees on Parental Leave
The first year with a new child is important. It’s a chance to bond and to come together as a family. Though most people take parental leave, many end it early and come back to work earlier than they need to. Part of that may be a desire to return to work, but there are also outside pressures—such as needing the extra money—that make people come back sooner than they may want to.
Offering top-ups while employees are on maternity and paternity leave is one way to ensure that employees are taking the time they need to be with their child. As well, make a plan ahead of time. Who will take over the employee’s responsibilities while they are on leave? Know how the work will be distributed and whether a temporary employee will be hired. Doing so will allow employees on leave to take their mind completely off of work and not have to wonder if their co-workers are struggling with additional workloads and responsibilities.
Furthermore, it’s important that new dads feel empowered to take time off to spend time with their child. The way parental leave is structured allows for fathers to take a minimum of 5 weeks of leave without affecting their partners regular 35 weeks (of course the 40 weeks may be divided between parents as they see fit). Make sure your company encourages all parents, regardless of gender, to take the time they want to be with their child.
Becoming a new parent is an exciting time. Employees should be able to enjoy it without concerns about money or how their employers are faring without them. More importantly, all employees (regardless of their gender or sexual orientation) should feel empowered by their employer to take the time they deserve with their new child.
As an employer, you can make sure employees are educated about how parental leave works. Offering top-ups for maternity and parental leave also go a long way to reduce any additional stress new parents may be feeling. Finally, creating a culture where employees feel empowered to take time off ensures nobody is coming back to work earlier than required.
New Parent Checklist
We have created a checklist for you to share outlining some of the important financial tasks your employees should accomplish with the arrival of each new child.