Parental Leave in New Zealand: Entitlements and Employer Obligations

New Zealand offers some of the world’s most generous parental leave entitlements. All eligible employees are entitled to 18 weeks of paid parental leave, funded jointly by the employer and the government. This is significantly more generous than many other developed countries.

However, many employers and employees misunderstand the funding structure, eligibility requirements, and flexible options available. This guide covers everything you need to know about parental leave in New Zealand.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an employment lawyer for guidance specific to your organization.

Parental Leave Entitlements

The 18-Week Entitlement

All eligible employees are entitled to 18 weeks of paid parental leave:

• 6 weeks — Funded by the government (Paid Parental Leave scheme)
• 12 weeks — Funded by the employer

This totals 18 weeks of fully paid leave.

Who Is Eligible?

An employee is eligible for parental leave if they:

1. Have been employed for at least 12 months continuously with the employer
2. Are having a child or having a child placed with them through adoption or foster care
3. Comply with notice requirements (at least 3 weeks’ notice)
4. Have provided the employer with proof of expected birth date or adoption placement date

Timing

Parental leave must be taken within 24 months of the child’s birth or placement.

Payment and Funding

Payment Rate

Parental leave is paid at the employee’s Ordinary Weekly Pay (OWP):

• OWP = regular weekly earnings including base salary and regular allowances
• Does NOT include bonuses, overtime, or irregular payments

Employer-Funded Portion (12 Weeks)

The employer is required to pay the employee’s full OWP for the first 12 weeks of parental leave.

Example: Employee with OWP of $1,000/week:

• 12 weeks × $1,000 = $12,000 paid by the employer

Government-Funded Portion (6 Weeks)

The 6 weeks of government-funded paid parental leave is funded by the ACC Paid Parental Leave scheme (or the Ministry of Social Development in some cases). The employer does not pay for these 6 weeks; the employee receives payment from the government.

In practice, this means:

• The employer pays for 12 weeks
• The government pays for 6 weeks
• The employee receives full pay for all 18 weeks

Eligibility and the 12-Month Service Requirement

Continuous Employment

The employee must have 12 months of continuous employment with the same employer at the time they take parental leave.

Important: This means:

• If an employee has worked for Employer A for 8 months and then changes employers, they start the 12-month clock over at Employer B
• The 12 months must be continuous (with the same employer)
• Periods of unpaid leave (personal, emergency) generally don’t break continuity, but long periods of unpaid leave may

Fixed-Term and Casual Employees

Fixed-term employees: Are eligible if they have been employed for 12 months continuously on fixed-term contracts.

Casual employees: Are eligible if they have a pattern of work indicating they are likely to work for at least 12 months. The test is not 12 consecutive months of actual work, but rather a pattern suggesting ongoing engagement.

Employees Who Don’t Meet the 12-Month Requirement

If an employee doesn’t meet the 12-month requirement, they are not entitled to statutory parental leave. However:

• The employer and employee can negotiate a voluntary agreement to provide parental leave
• This is often done in practice and is a good employment relations practice
• Some employers choose to provide parental leave to employees who haven’t yet completed 12 months

How Parental Leave Can Be Taken

By One Parent for 18 Weeks

The most common approach: One parent (typically the birth parent) takes all 18 weeks of parental leave.

Example: Birth mother takes 18 weeks, returns to work, then the other parent uses flexible work arrangements or annual leave.

Split Between Both Parents

Both parents can share the 18 weeks:

• Birth parent takes 10 weeks
• Non-birth parent takes 8 weeks
• Or any split agreed between the parents and employer

Example: Mother takes 12 weeks, father takes 6 weeks.

Extended Parental Leave

If an employee needs more than 18 weeks:

• They can take additional annual leave (if available)
• They can negotiate unpaid leave
• They can return part-time or on modified duties

Flexible Parental Leave

Parental leave can be taken flexibly:

• Not as one continuous 18-week block
• Could be taken as 12 weeks initially, return part-time, then take additional 6 weeks later

This flexibility must be agreed with the employer.

Notice Requirements and Timeline

Minimum Notice

The employee must provide at least 3 weeks’ notice of their intention to take parental leave.

Required Information

The notice should include:

• Expected date of birth (or placement date for adoption)
• Proposed start date for parental leave
• Duration of leave (how many weeks)
• How the leave will be split (if shared with a partner)

Employer Obligations

Once notified:

• The employer must confirm receipt
• Plan for coverage during the employee’s absence
• Ensure the employee knows their right to return to work
• Discuss flexible work options if applicable

Returning to Work After Parental Leave

Right to Return

The employee has the unconditional right to return to their job or a comparable job at the same pay and conditions.

This is a statutory right that cannot be waived.

Same Position vs. Comparable Position

• Ideal: Employee returns to the same position
• Acceptable: A comparable position with the same pay, location, and conditions
• Not acceptable: Forcing the employee into a lower-paid or less desirable role

Part-Time Return

If an employee wishes to return part-time or on flexible arrangements:

• The employer should seriously consider the request
• There must be a genuine operational reason to refuse (not just preference)
• Many employers successfully accommodate part-time returns after parental leave

Example: Employee returns at 20 hours/week for 6 months, then increases to full-time.

Superannuation During Parental Leave

An important question: Is superannuation contributed during parental leave?

The answer: It depends on the employment agreement and the superannuation fund’s rules.

• Most private schemes: No superannuation is contributed during unpaid leave, but the 12-week employer-paid portion may be subject to contributions (check the fund rules)
• Some agreements: Provide a top-up to ensure employees don’t lose superannuation benefits
• Best practice: Clarify superannuation entitlements in the parental leave policy

Secondary Caregiver Leave

Secondary caregiver leave is additional leave available to a non-birthing parent:

• Up to 3 weeks of paid leave specifically for non-birthing parents
• This is in addition to the 18 weeks above (or can be part of the 18 weeks)
• Funded by the government under the ACC scheme

Adoption and Foster Care

Parental leave is also available for employees who are:

• Adopting a child (domestic or international)
• Taking on a foster care placement

The same 18-week entitlement applies, with eligibility assessed from the date of placement rather than birth.

Notice for Adoption

For adoption, notice is typically provided once the placement date is confirmed. The 3-week notice requirement applies.

Common Mistakes and Compliance Issues

1. Incorrectly Calculating Service

An employer assumes an employee meets the 12-month requirement when they actually have 11 months. This makes the employee ineligible.

2. Requiring the Employee to Find a Replacement

Employers cannot make return to work conditional on the employee finding and training a replacement. The employee has a statutory right to return.

3. Reducing Pay or Position on Return

Paying the employee less, changing their responsibilities, or demoting them on return to work is a breach of the employment agreement and the Holidays Act.

4. Denying Flexible Work Requests

Employers must seriously consider flexible work requests. Refusing without a genuine operational reason can lead to a personal grievance.

5. Not Paying the Full OWP

Calculating parental leave pay incorrectly — for example, excluding regular allowances — results in underpayment.

Record Keeping

Keep records of:

• The employee’s start date (for 12-month eligibility)
• Parental leave notice received and dates
• Employer-funded portion paid (12 weeks)
• Amounts paid and dates
• Return-to-work arrangement

Retain for at least 6 years.

Key Takeaways

• All eligible employees are entitled to 18 weeks of paid parental leave
• 12 weeks are employer-funded; 6 weeks are government-funded
• Employee must have 12 months of continuous service
• Parental leave can be shared between both parents or taken by one parent
• Must provide 3 weeks’ notice
• Employee has an unconditional right to return to the same or comparable position
• Flexible return arrangements should be seriously considered
• Refusing flexible work requests without operational justification can lead to grievance claims

Parental leave is a valuable benefit that supports work-life balance and employee retention. Employers who support flexible parental leave arrangements generally see higher employee satisfaction and lower turnover.

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