As an employer, you must ensure your employees receive their appropriate leave entitlements, including parental leave. Shared parental leave is when the primary carer (usually the birth mother) transfers all or some of their extended and parental leave payments to their partner. However, whether your employee is entitled to shared parental leave payments depends on several factors. Hence, this article sets out:

  • what shared parental leave is;
  • who is eligible for parental leave; and
  • how you can ensure your employee receives their appropriate leave entitlements.

What is Shared Parental Leave?

Shared parental leave is when the primary carer (usually the birth mother) transfers all or some of their extended and parental leave payments to their partner. Usually, "mother" means:

  • the birth mother; or
  • in situations where neither parent gave birth to the child, the nominated primary carer, regardless of whether that person is male or female.

On the other hand, "partner" means the spouse or partner of the mother or nominated primary carer, regardless of whether they are male or female. Shared Parental Leave allows the primary carer and their partner to share in the responsibility of caring for their (usually newborn or newly adopted) child.

Who is Eligible for Shared Parental Leave?

Before considering whether your employee is eligible for shared parental leave, the employee needs to confirm whether they are the primary carer. For example, if the employee or their partner is giving birth to a child, the birth mother is the primary carer. However, she may be able to transfer all or some of her extended leave and parental leave payments to her partner if:

  • both meet the parental leave payment test as employees or self-employed people; and
  • the partner will stop work to be responsible for the child's day-to-day care.

Note that if your employee or their partner are not giving birth to the child, they must determine who will be the primary carer.

Once you know who is the primary carer, you then need to consider the employee's entitlements, depending on whether they are the primary carer or the partner. The entitlements vary for each parent, depending on whether they are:

  • self-employed; or
  • employees and therefore meet the six or 12-month eligibility criteria.

Ultimately, these criteria will differ for each person. Therefore, your employee will need to work through these criteria and confirm their eligibility before requesting shared parental leave.

Employees who do not meet the shared parental leave criteria may not be entitled to it. However, suppose they meet the parental leave payment threshold test and will be the primary carer. In that case, they could apply to you as their employer for negotiated carer leave to receive parental leave payments. As an employer, the law does not oblige you to say yes to negotiated carer leave. However, if you say no, you must explain why you did not approve their leave.

How Do Employees Apply for Shared Parental Leave?

If your employee is eligible, they should apply in writing for parental leave three months before the baby's due date. If your employee is the primary carer and they want to transfer part of their parental leave to their partner, their application should make clear how much leave they are applying for, and how much they want to assign to their partner. You will then respond to the primary carer's request for leave.

For example, if the primary carer is eligible for 26 weeks of paid parental leave, but wants to assign 10 weeks to their partner, then they will be applying for 16 weeks of shared parental leave. In this case, you would be deciding whether to approve 16 weeks of shared parental leave.

Conversely, if you are the employer of the partner of the primary carer, you will be asked to approve their application for 10 weeks of shared parental leave.

How Long Does an Employer Have to Approve the Request?

After an employee has told you that they will be taking shared parental leave, you have 7 days to respond to the employee and ask for more information if needed. If you need more information, the employee must provide this within 14 days. After you have received all the information, you have to formally reply to the employee within 21 days.

Who is Responsible for Making Parental Leave Payments?

Employers are not responsible for making shared parental leave payments. Hence, all employees or self-employed people are responsible for applying for parental leave payments through Inland Revenue. Additionally, if employees wish to do so, they can complete a transfer request to transfer their entitlements to their partner.

Key Takeaways

As an employer, it is important to be aware of your employees' entitlements. Shared parental leave is when the primary carer (usually the birth mother) transfers all or some of their extended and parental leave payments to their partner. However, the primary carer can only transfer parental leave payments to their partner if:

  • both meet the parental leave payment test as employees or self-employed people; and
  • the partner will stop work to be responsible for the child's day-to-day care.