New parents facing big income drop if bosses opt out of top-ups under State's parental leave scheme
Parents who will be able take up to a year off to care for their baby under plans to extend parental benefits face the prospect of a drastic drop in income as employers may axe wage top-ups.
Employers' group Ibec is advising members they do not have to supplement a new state-funded parental leave scheme just because they do it for staff on maternity leave.
This could put off workers from availing of the new plan as they would have to survive on just €245 a week.
Traditionally, many employers have paid a top-up to employees on maternity leave. The woman receives a State payment of €245 per week and many companies top this up to ensure staff get their full wage during their leave.
Under the new plan to extend parental benefit, mothers and fathers will get seven weeks of paid leave each by 2021, an extension of the promised two weeks' parental leave for each parent to be rolled out next year, which was announced in the last Budget.
When the new level of parental leave is combined with existing entitlements including maternity leave, paternity benefits and annual leave, it means couples will have enough time for one of them to be at home throughout the first year of their baby's life.
Employers groups Ibec and ISME warned the plan will have negative consequences for businesses, which will have to find replacement staff.
Ibec said government initiatives are being introduced piecemeal and would have significant implications for business.
"Ibec will be clarifying for members that just because a top-up arrangement may be in place for maternity leave, it does not follow the paid element of parental leave must be topped up," said a spokesperson. He said the longer the period of leave, the greater the impact and cost.
An ISME spokesperson said its members fear the Government could ultimately dump the cost of the plan on them.
John Barry of the organisation's national council said there is already a strain on small businesses to find replacement staff. "This is yet another disruption to how businesses run their affairs," he said. "In some ways, taking over a year is not as bad as short gaps. What's happening now is a lot of shorter breaks. Having people missing for seven weeks is very disruptive for a small firm.
"The Government should not be focusing on more time off but focusing on making it easier to go to work."
He said affordable state-run créches and tax relief on childcare would improve families' quality of life.