Understanding the Parental Leave and Employment Protection Act 1987
Picture this: your superstar project manager, the one who keeps everything running like clockwork, walks into your office, beaming, and announces they're expecting. It's fantastic news! But right after the congratulations, a wave of questions probably hits you. What are my legal obligations? How long will they be off? Am I supposed to pay them?
It’s a common moment for business owners, and navigating the rules can feel like a maze. The core piece of law you need to know about is the Parental Leave and Employment Protection Act 1987. Getting your head around this Act is essential, not just for staying compliant, but for properly supporting your team during a massive life event.
Juggling staff leave is one of the trickiest parts of running a business, and parental leave can feel especially complex. The good news? The core ideas behind the Parental Leave and Employment Protection Act 1987 are more straightforward than they first appear.
Think of it as a rulebook designed to create a fair and supportive process for both you and your employee. At its heart, the Act really does two main things:
It guarantees job protection for eligible staff, which means they have a role to come back to after their leave.
It provides access to payments, which are funded by the government – not by you, the employer.
This guide will cut through the legal jargon and give you a clear, employer-focused rundown of how it all works. We’ll break down who’s covered, the different types of leave available, and what your specific responsibilities are. Once you get the fundamentals, the whole process becomes so much easier to manage.
Why getting this right matters
Staying compliant with the Parental Leave and Employment Protection Act 1987 isn't just about avoiding a headache from MBIE. A well-handled parental leave process shows your team you value them as people, not just as staff members. It builds loyalty, boosts morale, and helps you keep talented people in the long run - a massive win for any small business.
Using a dedicated parental leave request form template can help streamline things and ensure you get all the information you need upfront.
For a small business, keeping a great employee after parental leave is far more cost-effective than recruiting and training someone new. A positive, legally compliant experience is the key to making that happen.
By the end of this guide, you’ll feel much more confident handling parental leave requests. You'll know how to manage the paperwork, communicate clearly with your employee, and plan for their absence and eventual return. Let’s dive in.
Determining employee eligibility for parental leave
Before you do anything else, the first - and most critical - step is figuring out if your employee actually qualifies for parental leave. The law that governs this, the Parental Leave and Employment Protection Act 1987, lays out the rules pretty clearly, but the different thresholds can feel a bit tangled at first glance.
Let's untangle it.
The law boils down to two main tests, both based on how long the employee has been working for you and what their average hours look like. And it’s not just for your permanent staff - these rules cover fixed-term and casual employees too, provided they meet the criteria.
The six-month and twelve-month tests
The whole thing hinges on the employee's work history in the 6 or 12 months immediately before the baby’s due date or the date they’ll take over caring for a child (like in an adoption or whāngai arrangement). This isn’t about their total tenure with your business; it’s all about that specific, crucial pre-baby period.
Here’s the simple check you need to run:
The 6-month test: Has your employee worked for you for at least an average of 10 hours per week for the six months right before their due date?
The 12-month test: Has your employee worked for you for at least an average of 10 hours per week for the twelve months right before their due date?
That phrase, ‘average of 10 hours’, is the real key. It’s what gives casual or variable-hour staff a fair go. Just add up all their hours over the 6 or 12-month window and divide by the number of weeks (26 or 52). If the result is 10 or more, they’re in.
We often see businesses run into trouble assuming casual staff don't get parental leave. If their hours average out to 10 or more over the right timeframe, they are absolutely eligible under the Act.
Applying the rules in the real world
Let's make this practical. Imagine you employ Alex, a part-time graphic designer whose hours change depending on your project workload.
Scenario: Alex and his partner are expecting a baby on 1 December. To check his eligibility, you’d look at his hours from 1 June to 30 November (the six months just before).
Calculation: Over those 26 weeks, you see he’s worked a total of 312 hours.
Result: 312 hours divided by 26 weeks comes to 12 hours per week. Since that's over the 10-hour threshold, Alex easily meets the 6-month criteria.
An employee’s eligibility level directly impacts what they’re entitled to. Passing the 12-month test, for example, opens the door to longer leave entitlements.
The table below offers a quick summary of how this works.
Parental leave eligibility at a glance
| Employment Duration | Average Weekly Hours | Primary Carer Leave Entitlement | Partner's Leave Entitlement |
|---|---|---|---|
| 6 months | At least 10 hours | 26 weeks of paid leave | 1 week of unpaid leave |
| 12 months | At least 10 hours | 26 weeks of paid leave & up to 52 weeks of extended unpaid leave | 2 weeks of unpaid leave |
This is just a quick reference - it's always best to confirm the latest details on the official Employment New Zealand website.
It’s also crucial to remember that the law protects the employee’s job. There’s a 'presumption of keeping the job open' which can only be overturned in very specific circumstances, like a genuine redundancy.
Finally, these rules are designed to cover all modern family structures, including adoption, surrogacy, and whāngai arrangements. A 'primary carer' is simply the person taking on the main responsibility for the child, regardless of gender, and their partner may also qualify for partner's leave.
Nailing this first step sets you up to manage the whole process smoothly and confidently, without any nasty surprises down the line.
The different types of parental leave entitlements
It's a common mistake to think of parental leave as just one big block of time off. It's actually more like a set of building blocks that your employee and their family can arrange to suit their own situation.
Getting your head around these different blocks is the key to managing the whole process smoothly under the Parental Leave and Employment Protection Act 1987.
Let’s break down the main types of leave. Each one has a different job, and some can even be shared between parents.
Primary carer leave
This is the main event and what most people think of when they hear 'maternity leave'. Primary carer leave gives the person taking the main responsibility for the new child up to 26 continuous weeks of leave.
It’s not just for birth mothers. This applies to the primary carer in any situation, including adoption, surrogacy, or whāngai.
The good news for you is that the government funds the parental leave payments during this time, not the business. As of 1 July 2024, the maximum weekly payment is $754.87 before tax for employees. These payments are handled directly by Inland Revenue, which takes the financial load off your shoulders. You can get more details on the annual adjustments to these government payments and how they work.
Partner's leave
Partners play a huge part, and the Act recognises this with a separate entitlement. Partner's leave is unpaid leave set aside specifically for the spouse or partner of the primary carer.
How long they get depends on how long they've been with you:
1 week of unpaid leave if they meet the 6-month eligibility criteria.
2 weeks of unpaid leave if they meet the 12-month eligibility criteria.
This time is usually taken around the birth or when the child arrives. It gives them a chance to support the primary carer and bond with the new baby without having to chew through their annual leave.
Extended leave
This is where that 'building blocks' idea really comes into play. Extended leave is an extra period of unpaid leave that can be taken by one parent or shared between them. To qualify, an employee needs to meet the 12-month eligibility test.
The total amount of job-protected leave a couple can take is 52 weeks (a full year), minus whatever primary carer leave was taken. For instance, if the primary carer takes their full 26 weeks, there are another 26 weeks of extended leave up for grabs. This can be taken by either parent or split between them.
Think of it like a family's 'leave budget'. They have a total of 52 weeks to use. The first 26 weeks are for the primary carer, but the rest is flexible. They can share it to best suit their family's needs.
Special leave
There's one more important piece to be aware of. A pregnant employee can take up to 10 days of unpaid special leave for pregnancy-related reasons.
This is often used for things like scans, midwife appointments, or antenatal classes. It’s a separate entitlement and doesn't come out of any other leave balance.
Meeting your core obligations as an employer
Alright, you've got your head around the leave entitlements. Now for the practical bit: what are your legal duties under the Parental Leave and Employment Protection Act 1987?
Getting these steps right is non-negotiable. Think of it as your roadmap for handling parental leave correctly, ensuring you’re being fair to your employee and protecting your business from any legal headaches down the line. It's a straightforward process if you take it step-by-step.
Notice periods and your formal response
The whole process kicks off when your employee hands you their written leave request. They need to give you at least three months' notice before their baby’s due date. This letter should spell out the type of leave they want, the start and end dates, and confirm they’re eligible.
Once that notice lands on your desk, the clock starts ticking for you. You have 21 days to provide a formal, written response. This isn't just a courtesy - it's a legal requirement. Your letter must confirm their entitlements and, crucially, state whether their job can be kept open for them.
Employment protection: the cornerstone of the act
This is the big one. If you take one thing away from this guide, let it be this: you cannot dismiss an employee because they are pregnant or because they’ve told you they’re taking parental leave. It's the absolute heart of the Parental Leave and Employment Protection Act 1987.
The law is built on a ‘presumption’ that the employee’s job will be kept open. In plain English, that means your default position must always be that their exact role will be waiting for them when they get back.
But what if your business goes through a major change while they're away? The real world can be messy. The Act acknowledges this, but the exceptions are few and the bar is set very high. You can only consider not holding a job open if:
There’s a genuine redundancy situation affecting their role.
Their position is so crucial that you can't find a suitable temp, and leaving it empty would cause serious disruption to the business.
Be warned: you would need rock-solid evidence to justify either of these scenarios. Simply wanting to make the temporary replacement permanent is not a valid reason.
Handling annual leave accrual
Here’s something that trips up a lot of employers. While an employee is on either paid or unpaid parental leave, they continue to accrue annual leave. Their entitlement just keeps ticking over, exactly as if they were still at work.
This means that when they return, they’ll have their usual four weeks of annual leave for the upcoming year, plus whatever they built up while they were away. You can’t pause it or force them to take it before they go.
It's also worth remembering that if your employee keeps making their personal KiwiSaver payments while on leave, you need to keep up your employer contributions too. For a deeper dive, check out our guide to KiwiSaver employer contribution rules.
The Act’s protections are robust and form a key part of New Zealand’s family-friendly employment landscape. Section 9, for example, specifically prohibits dismissing pregnant employees, which reinforces job security. This standard is often the minimum, with many public sector agreements offering even more generous leave. It shows how the Act sets a foundation for supporting working families and workforce stability, a topic explored in this World Bank overview on New Zealand.
Your legal obligation is to facilitate the leave and hold the job. The government handles the payments, and the law protects the employee. Frame every decision around these three pillars.
To make things crystal clear, here’s a quick checklist for handling any parental leave request that comes your way.
Your action checklist
Do: Respond in writing within 21 days of receiving a leave request.
Don't: Forget to state clearly whether their job is being kept open.
Do: Assume the job will be kept open unless there's an undeniable case for redundancy.
Don't: Dismiss an employee for any reason related to their pregnancy or leave.
Do: Continue to accrue their annual leave entitlement while they are away.
Don't: Suggest they take their annual leave instead of parental leave.
Do: Communicate openly about finding a temp and the plans for their return.
Don't: Make them feel like their leave is an inconvenience to the business.
Managing a smooth return to work
How you handle an employee’s return from parental leave is a huge moment. Get it right, and you build serious loyalty. A bumpy, disorganised return, on the other hand, can make a valued team member feel disconnected and undervalued from day one.
This isn’t just about being a good employer; it’s about retaining talent. The Parental Leave and Employment Protection Act 1987 gives employees the legal right to come back to their job, but your planning is what makes it a positive experience for everyone.
Planning for a successful return
A little bit of prep work goes a long, long way. Don't wait until the morning they’re due back to start thinking about their return. A proactive approach makes your employee feel genuinely welcome and sets them up to get back into the swing of things quickly.
Start by scheduling a casual chat a few weeks before their return date. This isn't a formal meeting, just a friendly catch-up to reconnect and ease them back into the loop. From there, you can map out a simple plan.
A successful return process usually includes:
A re-onboarding catch-up: Set this up for their first morning back. Run through key business changes, introduce them to new team members, and talk about any shifts in strategy that happened while they were away.
An update on their role: Be upfront about any changes to their projects or day-to-day responsibilities.
A tech check: Make sure their computer, logins, and email are all working perfectly before they arrive. Nothing’s worse than a first day spent on the phone to IT.
A team welcome: A simple team coffee or lunch is a great way to help them reconnect with colleagues on a social level.
For more tips on building a supportive workplace, our complete guide to HR support for small businesses is packed with practical advice.
Handling flexible working requests
It’s completely normal for parents returning from leave to ask about flexible work arrangements. The juggle is real, and having some flexibility with hours or location can make all the difference. As an employer, you have a legal duty to seriously consider these requests.
You can’t just say ‘no’ without a solid business reason. You must assess the request fairly, looking at the potential benefits for the employee and weighing them against any real negative impacts on the business. This thoughtful consideration is a key part of your obligations.
Since it was introduced, the Parental Leave and Employment Protection Act 1987 has had a massive impact on women's workforce participation in New Zealand. Research shows the job security it provides has supported women's careers, leading to higher long-term earnings and a more stable place in the labour market. You can read more about the Act's economic impact in this detailed report.
Your employee has a right to their old job. If their role was made genuinely redundant while they were away, you are obligated to offer them a substantially similar position if one is available.
Ultimately, a well-managed return is a win-win. Your employee feels supported, and your business keeps a skilled and experienced team member. By planning ahead and communicating openly, you can turn a potentially tricky transition into a positive milestone.
Common questions from NZ employers on parental leave
Even when you feel you’ve got a handle on the Parental Leave and Employment Protection Act 1987, the real world has a habit of throwing tricky questions your way. It’s completely normal to have those “what if…?” moments.
To make your life a little easier, we’ve put together quick answers to the questions we hear most often from NZ business owners. Think of this as your rapid-fire guide for clearing up those practical points of confusion.
Who pays the employee on parental leave? me or the government?
This is easily one of the biggest and most common mix-ups. The good news is, parental leave payments are funded entirely by the government and paid directly to your employee by Inland Revenue (IRD).
As the employer, you do not pay their salary while they are on leave. Your main responsibilities are to formally approve the leave and hold their position open for their return.
While you aren't required to pay them, some businesses do choose to offer a 'top-up' payment as an extra benefit to support their staff through this time. One important thing to remember: their annual leave continues to accrue, and you must keep paying your employer KiwiSaver contributions if they continue making their own.
Can my employee work for me while they are on parental leave?
Yes, they can, but only under the very specific rules for ‘keeping-in-touch’ hours. This feature of the parental leave act is designed to help employees stay connected to the workplace without messing up their leave entitlements.
An employee can work for up to 64 hours during their parental leave payment period. The key here is that these hours must be completely agreed upon by both of you - you can't require them to work, and they can't insist on coming in without your agreement.
Any hours they do work must be paid at their normal contractual rate. It’s a perfect setup for things like handover meetings, essential training, or getting an update on a crucial project.
What happens if my employee resigns during or after parental leave?
If an employee on parental leave decides not to come back, you simply treat it like any other resignation. They are still required to give you the standard notice period outlined in their employment agreement.
Their employment officially ends on the date their resignation takes effect. Crucially, their decision to resign does not affect their entitlement to receive the full period of government-funded parental leave payments. The job protection part of the law just means the role is held for them if they choose to return. If they don't, the role becomes vacant and you're free to fill it permanently.
Navigating the finer points of the Parental Leave and Employment Protection Act 1987 can be tricky. At Konnect Koncepts, our team provides expert HR support to ensure you stay compliant while supporting your team.
This article reflects employment law and best practice in New Zealand as at June 2024. It is intended as general guidance only and does not replace professional legal advice tailored to your situation.
