Employers typically consider maternity and parental leave policies when they want to incentivize employees to return from their leaves after having a child, and also when they realize that supporting their employees financially while on a period of a reduced income makes sense for long term employment relationship. Particularly, in the current Canadian job market which has been described as a “candidate” job market. Here are four things to keep in mind:
1. Is a policy necessary?
Unless there is anything additional or extra that you are providing your employees, your workers may already be protected by B.C.’s Employment Standards Act (the “Act”) (see sections 50 and 51), and the Employment Insurance (EI) regime. If your workforce is excluded from the Act (as are architects, engineers, lawyers, naturopaths, insurance agents, and others) you can still use the Act as a reference for how to manage these types of leaves[i].
2. What you need to know to get started.
If you decide that your organization needs a policy, make sure you understand the difference between:
- Maternity Leave, which includes an EI benefit maximum of 17 weeks. This benefit is for the person who is about to, or has, given birth; and
- Parental Leave, which includes an EI benefit maximum of 35 weeks (“standard”) or a maximum of 61 weeks (“extended”). This benefit is for either parent, or for adoptive parents.
Keep in mind that the parental leave can be taken once the maternity leave has expired, turning the standard leave into 52 weeks, and the extended leave into 78 weeks (18 months). Also keep in mind that Parental leave can be taken at any time within the first 18 months of the child’s life, or the first 18 months of the child being placed with the adoptive family.
3. Will you top up?
If you are providing your employees with a supplementary amount to their EI benefit, or “Top-UP” a policy is definitely recommended. Consider:
a. The reasons behind providing the Top-Up. If your goal is to incentivize parents to return from the leave and to stay with your organization, say so in the policy. Also, a repayment clause may be appropriate. For instance, “should you resign during the leave, or in a period of 6 months from your return from leave, you will repay the amount of the Top-Up in full”.
b. The amount of the Top-Up. Crunch the numbers and determine how much you can afford and for how long you will provide the Top-Up. Also consider what your competitors are doing. Some employers provide 60% of the difference between the employees’ pay and the EI benefit. Others provide much higher percentages, with some employers toping up to 100% of the wages. The period of time can also vary from 6 weeks on the lower end, to the full 78 weeks at the higher end, with most employers capping the top up somewhere between 35 weeks and 52 weeks. Because you will need to know how much the employee is receiving in EI to calculate the Top-Up amount, it makes sense for you to make the employee’s receipt of the Top-Up on the condition that they receive EI.
c. The eligibility for the Top-Up. Is this something you want to provide to all employees as of day one? Or something you want to reserve for your permanent full-time employees with a certain amount seniority? Since this is not a benefit that is required under the Act, you have flexibility as to who gets it and when, as long as you are not running afoul of the B.C. Human Rights Code.
4. What should happen while the employee is away.
If your workforce is covered by the Act, then you need to ensure to continue to calculate annual vacation, to continue benefits and to count their time away to their length of service with your organization, as if the employee was actively at work during that time. If the employee paid some of the premiums for the benefits, you can arrange for the payments to continue to be made by the employee while they are on leave.
Also, upon the end of the leave, employers have an obligation to provide the employee with their same position or an equivalent one. Make sure that anyone you hire to cover the employee that is on leave is hired under a temporary employment agreement with a notice of termination provision that allows you to welcome the employee on leave back without delay.
This blog is not intended to serve as legal advice, and only provides general information. Every situation must be considered on its own facts. Need legal advice? Contact us by phone at 604 535-7063 or email [email protected].
[i] The information in this blog applies to workplaces that are provincially regulated and does not apply to workplaces that are federally regulated (i.e. banking, shipping, telecommunications) and covered under the Canada Labour Code (“CLC”). The maternity and parental provisions of the CLC are similar to those of the Act, and can be found at sections 206, and 206 of the CLC.