New Parental Leave Rules in Canada

November 10th, 2017 | Posted by:

Clients have been in a panic ever since the announcement yesterday of the new maternity leave (and caregiver) benefits coming into effect December 3, 2017.

As of now, the changes will only affect federally regulated employers, i.e., 6-8% of workers.  So out of my client list, that means credit unions, transportation companies, and first nations bands are affected.

The remaining provincially regulated employers have a bit of a reprieve to watch and learn from our federally regulated brothers and sisters regarding what to and not to do.

I am pretty sure many provinces will follow suit on the leave extension, but hopefully they will do a better job of helping their constituents with the implementation.

For those of you in federally regulated environments, here is what you need to know about the announced changes:

  1. The changes come into effect December 3rd.  Yup, that’s a whole 24 days to get organized.
  2. Anyone currently on leave or who goes on leave before December 3rd doesn’t qualify for the extension.Cute cartoon baby
  3. After December 3rd, eligible new parents will be able to spread 12 months of benefits over 18 months.  There is no additional money being paid to parents, just more time to draw the money over.
  4. Employees still need to meet the minimum of 600 hours to qualify.
  5. The additional 26 weeks of time can also be shared or taken by new dads, so paternity leave can change as well.

Beginning December 3rd, how many parents will be willing to drop their monthly EI income to a lower amount just to stay off longer remains to be seen.  But if they want to, you as a federally regulated employer will have to adjust and align with the new policy.  To that end, here is what you will need to be doing on the implementation side to get ahead of the curve:

  1. You will want to amend your leave policy to fit the new rules.  What won’t change is that anyone requesting a mat leave or paternity leave should still put their request in writing, giving you notice of:
    1. The anticipated date the leave will start, and
    2. How long the employee wants to be off within the new guidelines.
    3. Previously maternity leave was 17 + 35 weeks and paternity leave was 37 weeks.  Parents now have an additional 26 weeks to divvy up between them.  How they choose to do so is up to them, but you will need to make the parameters clear.
  2. If you offer maternity leave top-up, take heed.  Not only will the time frame for the leave be longer now, but the amount of EI the new parent takes each month is lower. So if your plan is designed to top up from EI level to 100% and currently EI level is at 45%, that means you currently top up 55%.  But when the EI each month for the new mom drops to 33%, you will now need to make up 67% each month for 18 months.  That is a significant cost to employers.  Surprise!
  3. If you pay all or a portion of benefits for people on leave, you will be paying that for longer (up to 6 more months) than you were before.
  4. If you have benefits or perks set up for longer term temporary workers (e.g., those covering maternity leaves), you may want to rethink the parameters for eligibility.
  5. Anyone who has submitted their leave request which will begin after December 3rd (its fairly obvious by now who is pregnant after all) should be contacted about whether or not their plans will change.
  6. Hiring processes to replace people going on maternity or paternity or parental leave after December 3rd may also require revisiting because someone hired on a 1 year temporary contract to backfill a maternity leave position may need to be extended up to 18 months.
  7. How you promote from within, offer bonuses and conduct wage reviews to people on these leaves may need revisiting as well.  Previously a maternity leave for one year could span two fiscal years, but 18 months can span 3!  As an HR person, I know how hard it is to convince a manager to reserve a performance oriented wage increase for someone who is off work, may not return, and has been out of the “game” for so long, the rules of engagement have changed.  Frankly, as a woman who enjoys her career, that would be a major consideration in my decision making about how long to take off as well.  It will be interesting to see how important this perk really is to Canadian parents.
  8. Your collective agreement may need to be revisited as well if there were benefits and terms negotiated assuming a one year mat leave.

With any change, the devil is in the details.  Implementing a new policy (no matter how wonderful), can wreak havoc in a workplace unless:

  • The details are carefully thought through,
  • Systems and tools are modified for the new reality,
  • Decisions are made fairly and transparently, and
  • Communication regarding all of this is clear, concise, consistent, and continual.

We hope you think of LoveHR to help with all of these details.

If you have something to add, please comment below.