A look at extended parental benefits one year on

With a baby due in March, Ashley Bangsund and her partner Nick Goodall didn’t think twice about whether to take the traditional 12 months of employment insurance parental benefits or opt for the new 18-month extended version introduced by the federal government in December 2017.

“The longer leave feels too long to go with a reduced income,” says Bangsund, a sustainability coordinator with the Vancouver School Board. “Maybe if we lived in a less expensive area the longer leave might be possible, but the 33 per cent salary replacement offered through EI won’t work for us.”

A year has passed since the federal government introduced the option to extend EI parental benefits to 61 weeks. When combined with 13 weeks of maternity leave, it allows parents to choose to take either a lower EI payout of 33 per cent of average weekly earnings over 18 months or stick to the standard 55 per cent spread across 12 months. By now, most provinces have revised provincial employment standards to reflect the change.

Read: Budget boosts parental leave to 18 months, introduces caregiving benefit

Although the new option is generally recognized as well-meaning, no one is expecting a huge uptake. For one thing, as Bangsund points out, the financial hit is likely to discourage many working parents from taking a longer period away from their jobs.

“A lot of parents may like the idea of taking 18 months off with their baby but most can’t afford it,” says Debby Carreau, chief executive officer of InspiredHR in Vancouver. However, choosing the shorter leave isn’t just about money, she adds. “Many men and women looking to advance their careers are worried about losing opportunities to learn and gain experience. Legally, their job is protected, but what do they miss by taking a longer leave?”

Despite the drawbacks, 22,000 Canadian parents had signed up for the extra six months of parental leave by September 2018, according to Employment and Social Development Canada. While it’s still too early to understand the impact of the extended leave, a recent Benefits Canada online poll found 39 per cent of employers believe the longer leave is causing problems in the workplace. Survey respondents didn’t specify the types of problems, but there are several potential issues, challenges and opportunities that employers should be considering.

Complexities and lack of awareness

The extended parental leave option is just one of several new federally legislated unpaid leaves announced over the past year by the federal government and adopted by some provinces. Employees may also be eligible for time off for personal and family responsibilities, domestic violence, critical illness of an adult family member, the death or disappearance of a child as a result of crime and critical illness of a child.

Read: Federal government seeking to add more paid personal leave days

Survey says

A Benefits Canada online poll asked whether employers are experiencing issues since the federal government extended EI parental benefits to 18 months at the end of 2017.

Yes, it’s created problems in the workplace.

No, the program is working well.

I don’t know, very few or no employees have taken the new leave.

“Employers are struggling to understand how maternity and parental leaves coordinate with employee entitlements in relation to child and/or family care leave, personal leave or sickness or disability benefits programs,” says Karen Millard, Canadian research and compliance leader at Willis Towers Watson. “Trying to keep up with evolving statutory leave requirements has definitely been a challenge over the past few years. HR teams have a lot to deal with beyond the fact that parental leaves might be longer than before.”

Flexibility is key, adds Millard. “Employers are revisiting their policies and processes for confirming which programs continue during leaves, as well as managing ongoing employee contributions, opt outs, plan credit balances and life event changes.

Administration needs to take into account that leaves usually extend over one or more re-enrolment periods, and also that plan members may encounter fundamental changes in their circumstances during leaves. Employers are also taking a second look at vacation and [paid-time-off] policies, including rules for accrual and use before, during and on return from extended leave periods.”

Read: Best practices for return-to-work committees

It’s a lot to consider, and smaller employers may not be on the ball. Dan Kelly, president of the Canadian Federation of Independent Business, says governments picture larger employers with a human resources team when introducing employment legislation. “They don’t think of a four-person operation trying to keep up with so many changing federal and provincial employment standards. Often the employees are the ones letting business owners know about the new provisions they’d like to take advantage of.”

In 2018, the CFIB received 35,000 calls from employer members, its highest number ever, says Kelly, noting it’s been challenging for employers to keep up with legislative changes. “But I haven’t heard any cries that the 18-month parental leave is a giant problem so far. The number of Canadians taking advantage of it so far is low, and I don’t think there is even much awareness among Canadian workers that the option is available.”

While the 18-month option is relatively new, Mike Olsson, vice-president of human resources professional development at Edmonton-based PCL Construction Ltd., says he expects to see more uptake as general awareness grows. “We do have employees taking the 18-month leave. Some are sharing it with their partner, others are taking the entire 18 months. As for the time they decide to take, it is a personal decision and varies with each parent.”

Read: How will 18-month parental leave affect top-up programs? 

Another issue for employers to consider is how the longer benefit period may affect top-up programs. However, it may only be a problem where an employer offers a top-up for the full statutory parental leave, which isn’t very common, says Kelly O’Ferrall, an employment and labour lawyer at Osler Hoskin & Harcourt LLP in Toronto. “But if they do offer a full top-up, they could find they are inadvertently spending more than budgeted,” she adds, noting employers may need to amend their top-up policies to address the longer leave.

The majority of employers that do offer top-ups are working to coordinate with available employment insurance or Quebec parental insurance plan benefits, says Millard, adding most are simply topping up the level of EI or QPIP benefit an employee actually receives. “To do otherwise is generally too administratively onerous.”

Encouraging second parents to take time off

While both parents can share parental leave, they must adhere to the same decision on whether to take the traditional 35 weeks or the extended leave. Up until now, few non-birthing parents — typically fathers — outside of Quebec have claimed parental benefits. While 80 per cent of second parents in Quebec claimed parental benefits in 2016, only 12 per cent did so in the rest of Canada, according to Statistics Canada. “There is still a stigma for men to take parental leave,” says Chandra Pasma, senior researcher at the Canadian Union of Public Employees. “The new parental leave is great but it won’t change the gender dynamics in the workplace.”

In March 2019, a new federal government program is aiming to encourage non-birthing parents to take up to five weeks of leave. The new leave is available on a ‘use it or lose it’ basis, since parents who don’t share parental leave won’t qualify. Parents who take the extra weeks will receive EI payments based on whether the couple chose to take the traditional or extended parental leave.

“We expect a far greater portion of new fathers and adoptive parents will decide to take at least five weeks off to avoid seeing this EI benefit fall off the table,” says Willis Towers Watson’s Karen Millard. “We also expect that a growing percentage of employers will expand paid leave programs — including EI and QPIP top-up programs — to encourage all parents to take at least five weeks off on the birth or adoption of a child.”

Replacement and retention

Finding employees to cover maternity and parental leaves may also be a challenge for employers, regardless of the length of the leave. “Smaller employers, in particular, may see this as a burden,” says Kelly. “It puts employers in an awkward spot because it’s hard to cover a short leave, let alone 18 months. Although some people like contract work, in general there is a shortage of labour that makes it hard to find replacement staff no matter how long the leave.”

Olsson says the extended leave makes it easier for PCL Construction to recruit a replacement candidate, since the position is more attractive with the extra time. But it does create other challenges. “With the employee going on leave being away longer, the return to work may create new challenges, such as a new work environment and different team members, potentially,” he says. “There could also be additional costs to the company, as we may need to cover benefits for two individuals for an additional six months (both the employee on leave and the contract employee), thus resulting in an increase to benefits costs.”

Read: Will 18-month parental leave reduce pressures on working families?

Greg Jacobs, external communications manager at Saskatchewan Telecommunications Holding Corp., says about 20 per cent of the company’s 2018 parental leaves were the 18-month option. “To date, because we haven’t had a huge uptake on it, we haven’t really run into any challenges. That said, we anticipate there will be probably be opportunities, but also some challenges with it.”

On the opportunity side, he says it will be more attractive for potential candidates to take an 18-month role over a 12-month contract, so he expects more and better qualified candidates. “But the reverse of that is some businesses may struggle filling very niche roles, roles that would require specific training,” he says. “In that case, some of those businesses may have to operate without someone for 18 months versus 12. So we see . . . positives but there could also be some challenges.”

Avra Davidoff, a Calgary-based workplace psychologist, has written guides on how to effectively navigate maternity leave career transitions for employees and employers. “My research found that many women felt out of touch when on leave,” she says. “Even after a 12-month leave, women said they felt a loss of confidence in returning to work — not because they’ve lost skills or competence, but they are wondering if they can still do the job.”

Read: Move to 18-month parental leave criticized as ‘misguided’

In Numbers

The number of parents who chose the extended parental benefit option between December 2017 and September 2018

The number of maternity claims paid out in 2016-17

The number of parental claims that were paid, of which 85% were women and 15% were men

Source: Employment and Social Development Canada

Communication between the employer and employee before the leave can help smooth the transition back to work, says Davidoff. “Many employers assume employees want their job back, but that may not be the case. You need to create a collaboration between employee and employer to share information about career plans and opportunities. If the employee agrees, the employer can stay connected during the leave to discuss learning opportunities such as courses, seminars, webinars or membership in an industry group to keep the employee in the loop so they feel valued and want to come back to work.”

On the other hand, the longer leave option may make it easier for mothers to return to work. For one thing, it’s likely easier to find daycare for babies once they’re 18 months old. And if parents share the parental leave, it can help mothers make a smoother transition back into the workplace.

“You never know how it will work out with a baby,” says Bangsund. “If all goes well, Nick will also take some parental leave. And since my employer will let me work flexible hours when I come back, we hope we’ll even get some time off together with the baby. We’d like that.”

Sonya Felix is a Vancouver Island-based freelance writer.