Employers to run Paid Parental Leave Scheme through their Payroll or risk large fines

Aussie businesses could face fines of up to $33,000 if they fail to run the government's new paid maternity scheme through their payroll.

Thousands of mothers have applied for the $570-a-week paid parental leave scheme since it was introduced on January 1, according to new figures released by Families Minister Jenny Macklin.

Faced with a choice between the paid parental leave scheme offering up to $10,000 to working mums and the $5000 baby bonus, available to stay-at-home mums, eligible parents are flocking to the new scheme, with over 15,500 families lodging applications to date.

But small business groups are fighting back over demands they administer the scheme after July 1, with a legislative showdown brewing as Parliament resumes. They advise that many employers’ simply are not aware of the scheme and the potential fines they could face for failing to comply.

MPs will vote on Coalition reforms to force the Gillard Government to instruct Centrelink to keep running the scheme.

Ms Macklin told Sunday Herald Sun she was determined to see the scheme administered by business rather than Centrelink. "Paid parental leave is a workplace entitlement, just like annual leave or sick leave," she said.

"Our scheme helps employers retain skilled and valuable staff...It's important for women to maintain a connection to the workplace.”

"Employers will pass on Government-funded parental leave pay to their long-term employees through the employee's usual pay cycle and will receive the funds from the Government in advance," she added.

But the Opposition’s Small Business Spokesman Bruce Billson said: "It's an unnecessary burden on small business and exposes employers to big fines."

The Council of Small Business of Australia (COSBA) Executive Director, Peter Strong, said there was little explanation for the red tape other than a philosophical view that the maternity payment should be a workplace entitlement rather than a welfare payment.

"It's about time the Government funded paid maternity leave and that's great, but we don't want to be the paymaster," he said.

Parents can apply for the taxpayer-funded scheme up to 3 months before the birth of their child and can take it in conjunction with, before or after any employer-funded leave. It is taxed but can also be transferred to fathers if mothers return to work early.

(Sources: Sunday Herald Sun and Payroll News)