The New Baby Bump: What An Extended Maternity Leave Might Look Like
For some parents who take parental leave, a year may feel like an awfully long time. While parenthood and newborn bonding can be a life-changing experience, raising an infant is not without numerous stresses, and the workplace can actually become an escape from domestic pressures.
So when the 2017 Federal Budget announced the option for an 18-month parental leave, public reactions were mixed. The plan can be extremely beneficial for parents who desire staying at home longer, but may place a tremendous strain on employers facing a difficult staffing challenge.
Let’s unpack first of all what ‘maternity’ leave is, how it works, and what the new move could mean for employers, employees, and everyone in between.
How It Works
For starters, there is no such thing as ‘maternity leave,’ at least not under Ontario’s Employment Standards Act, 2000 (“ESA”). The ESA divides leave for new parents into two different categories: pregnancy leave, and parental leave.
If an employee becomes pregnant more than 13 weeks after she began working for her employer, then she is entitled to 17 weeks’ of leave any time within the 17 weeks prior to her due date, or commencing on the date that the baby is born. She should give the employer two weeks’ notice (obviously impossible in some situations, babies can be unpredictable like that), and may be requested to provide a doctor’s note. If the employee suffers any complications, notice may be provided on the date leave began, and the employer may request medical documentation. Pregnancy leave ends after 17 weeks, or the employee must provide four weeks’ written notice if they are not returning.
The other two-thirds of the leave are deemed to be parental leave, which can be taken by either parent, and also applies to families who have a child come into their custody. Again, the employee must be with the employer for 13 weeks prior to the leave, and it must start within the first 52 weeks of the child’s life or time with the family. Leave should be given two weeks early where possible, and notice if an employee intends not to return should be provided four weeks in advance.
During these leaves, employees are eligible to collect Employment Insurance (“EI”) benefits, which are broken down into maternity and parental benefits. There are certain criteria to be eligible to collect these benefits, but a primary requirement is that the employer has been making deductions for EI contributions, as independent contractors are not eligible to collect EI benefits.
The calculation formulas are intricate, but most new parents eligible for EI are able to recoup up to 55% of their previous salary, up to a maximum of $543 per week.
Yes, that’s right, $543 per week. For anyone who’s ever raised a child (and in full disclosure I have not), that money goes fast!
However, some parents are more fortunate in that their employers help alleviate the burden. According to Statistics Canada, roughly one in five new mothers has an employer that ‘tops up’ their benefits, leaving them with a comparable salary during their time away, for at least a period of their absence. These rates are higher in public sector employees and in Quebec, but they do not apply to the majority of new parents in Canada, who are left to make due with EI benefits and any additional household income.
With the new Federal budget, the Trudeau government has come through on its campaign proposal to extend parental leave by an extra six months, to 18 months’ rather than the previous twelve.
But, of course, there’s a catch. While the federal government may make an 18-month leave an option, they will not be providing any additional funding into the program. In other words, should anyone take the 18-month option, the maximum earnings per week would be reduced from $543 per week down to $362, or 33 per cent of potential earnings rather than the previous 55.
The Federal government suggests that the change offers families more flexibility, which may allow parents to take different periods of time off, or to create a more unique scheduling arrangement based on their family circumstances that allows a parent to spend more time at home with their new child.
Yet at only $362 per week, is that even feasible?
Parental leave has never been easy for employers. While it is an integral part of the Canadian social fabric and a deeply protected right for new parents, the practical reality can be challenging for employers to work around. Employers must accommodate the employee's absence, whether finding another individual to fulfill the role on a contract, or re-assigning work duties for a time, while protecting the employee’s position for their awaited return.
This is not an easy feat. Employees who take leave are entitled to return to the same position upon their return, or one of equivalent salary and status. However workplaces can change dramatically during the course of a year, and business can ebb and flow, placing strain on the employer both via a key employees’ absence, followed by the timing of their eventual return.
On the plus side, some experts have argued that one year is simply too short a time to adequately train and accommodate a new contract employee into an existing role, and by the time they do get into ‘the swing of things,’ their contract is near its end and their predecessor is due to return. Alternatively, a longer absence may make it easier to lure a high-skilled employee into a more stable contract role, and may make the training period less detrimental to the flow of the business.
That said, the potential challenges to an 18-month leave are numerous. A protracted leave means a returning employee will likely require re-training, and there will be a more prolonged adjustment period to reintegrate the returning employee back into their role. Furthermore, for families who wish to have children close in age (as is of course their right), a series of consecutive 18-month leaves can make an employee’s position difficult to sustain. Lastly, while a larger business may be able to top up salary for several months, an 18-month top up is both impractical, and frankly unlikely from most employers.
Naturally, a business may change to the point where holding the spot is simply unsustainable. If an employer must terminate an employee while on leave, or shortly thereafter, they would be wise to do so properly, so as to minimize any potential claims of constructive dismissal, or discrimination on the basis of sex, gender, or family status.
For employees, the new option of an 18-month leave comes with both its benefits and its drawbacks.
For employees who wish to take more time off and felt one year was not enough, the extension may just provide an ideal solution. The extended option may also make it easier for both parents to take a leave that’s divided between them, potentially allowing infants and toddlers more bonding time with fathers who may otherwise be regularly absent for work.
Yet aside from the most financially comfortable, $362 per week is barely enough to sustain an individual, let alone two or more. Thus, the extended leave is almost a fallacy, and at best impractical. Critics have argued that the extension benefits only wealthy parents who do not rely on the income that would be lost due to the leave.
There is also criticism that the leave places women at a severe disadvantage by removing them from the workforce for an extended period of time, making it less likely that they will return to work with the same earning potential as they had before. While parents on leave are entitled to return to the same salary, there are naturally lost opportunities during a prolonged absence that cannot easily be replaced.
For both employers and employees, pregnancy and parental leave can be based around something truly wonderful, but they are not without their challenges on either end. For employers seeking advice on how to best structure their workforce around an employee taking leave, or for employees who feel their rights were not adequately protected while away, I would be glad to speak more about your issue. Contact me today to set up a consultation and we can discuss how our firm may be able to help.
The bottom line is that 18 months sounds like an awfully long time, and it truly is…although most new parents would argue that it goes by in a flash!