The Parental Leave Extension: New Rules, New Costs?
It has been nearly one year since the federal government’s changes to maternity and parental leave went into effect, which immediately impacted many workplaces across Canada. While these effects were primarily felt in federally-regulated sectors, many observers in the human resource field speculated that the changes would eventually impact all workplaces.
If, as claimed this time last year, the changes would impact workplaces “in ways that might not be immediately obvious,” is one year enough time to now provide updates on actual effects from the federal level moves? Can we perhaps draw some insights into how the changes will project through 2019 and beyond?
In referring to the last year’s Workopolis article titled “What you need to know about parental leave” (January 23, 2018) , we address some key takeaways from the article.
Maternity vs. Parental Leave (Employment Insurance benefits)
Maternity benefits: Offered to a maximum of 15 weeks, to biological and surrogate mothers who cannot work because they are pregnant or have recently given birth. The weekly benefit rate is 55% of the claimant’s average weekly insurable earnings up to a maximum employer “top up” amount to 97%. The only real revision to this program is that it can now be taken up to 12 weeks prior to the birth instead of 8 weeks ahead.
Parental benefits: Offered to parents who are caring for a newborn or newly adopted child or children. These benefits are separate from the 15 weeks granted to the biological mother. The standard benefits are paid for a maximum of 35 weeks at 55% of average weekly insurable earnings, and can be claimed within 12-months after the week the child was born or put up for adoption.
The new federal regulations  can ONLY be applied if the child was born or placed for adoption on or after December 3, 2017. This extended parental benefit can be claimed over a longer period, but with a tradeoff.
- Parental benefits can be now be paid for a maximum of 61 weeks and must be claimed within a 78-week period (18 months) after the week the child was born or placed for the purpose of adoption.
- The tradeoff is that the benefit rate is only 33% of the claimant’s average weekly insurable earnings up to a maximum amount. The two parents can share these 61 weeks of extended parental benefits. Employers can again make the maximum “top up” to 97% of the average weekly insurable earnings.
The “cost of benefits” implication
A simple observation shows the potential for parental leave costs to suddenly increase due to extending the “top up” period by an additional six months. The government regulates the employer’s ability to negotiate a top up amount, i.e. up to 97%, but doesn’t regulate the number of weeks the top ups are to be applied. If the employee’s contract language has the employer responsible for a maximum top up over the entire parental leave, then costs will increase on the extended benefit period in two ways:
- The employer’s maximum top up rate will increase by 22% over the extended period, as the federal government only covers 33% over the 18-month term (instead of 55% over twelve months).
- The additional six months of the extension create more “top up time” beyond the original 12-month term.
In a tight budgeting period, employers will want to make sure they aren’t surprised by prior parental leave commitments in an employee’s contract, e.g. for topping up benefits to the max, but expecting to come up with a lesser amount over a shorter period of time. Conversely, in a tight hiring market, the employer may want to highlight their parental leave policies as better than their competitors offer and that the extended leave options create more flexibility to reach a deal.
Finally, it is important to realize that each province in Canada has its own employment standards that may or may not line up with federally-regulated sectors.The best approach is to check on these standards for the applicable province or territory.  In particular, the new Ontario Provincial government has pushed to revoke many of the new federal regulations, as well as existing regulations from the previous provincial government:
On November 21, 2018, Bill 47, the Making Ontario Open for Business Act (the Act) received royal assent and became law in Ontario. Although the Act preserved certain amendments introduced under Bill 148, the Fair Workplaces, Betters Jobs Act, 2017, including the right to extended parental and pregnancy leave and three weeks of paid vacation after five years of employment, it reversed many Bill 148 reforms. 
The Province of Québec is also unique in that its policies go beyond employment standards. Québec’s residents have parental, adoptive, maternity, and paternity benefits all administered by the provincial government through the Quebec Parental Insurance Plan.
Here is a list of what you are legally entitled to PROVINCIALLY (from babycenter.ca).
|Province||Maternity or Pregnancy Leave (in weeks)||Parental Leave (in weeks)||Adoption Leave (in weeks)|
|Newfoundland and Labrador||17||52||17|
|Nova Scotia||17||52 (37 if you’ve already taken maternity leave, called pregnancy leave here)||52|
|Ontario||17||61 (63 if you have not taken maternity/pregnancy leave)||61|
|Prince Edward Island||17||35||52|
|Quebec||18 (5 weeks paternity leave also available to new dads)||52||52|
|Saskatchewan||18||34||18 (37 if you did not take maternity leave)|
Latest posts by Julia Sustakova (see all)
- The Parental Leave Extension: New Rules, New Costs? - January 23, 2019
- Ten Ways to Make a Lunch Break Work for You - November 30, 2018
- Where You Work is How You Work: Office Design Strategies - October 31, 2018