Finding a nexus with taxation for this article is probably as difficult as trying to write-off the cost of having your teeth crowned (my latest experience!) but nevertheless a good ‘just so you know’. Covid as we know it has had all sorts of consequences, one of those being that employees on parental leave may be looking to return to work earlier than planned for a number of reasons.
In the first instance, both the employer and the employee have a duty to act in good faith to ensure the early return benefits both parties, and in this regard, the employer should be clear as to whether it is considered to be an occasional, temporary or permanent return to work.
With an occasional return, the employee can have ‘keeping in touch’ days to help them remain connected to their employer, however the total hours during their parental leave payment period cannot exceed 64, and they cannot work within 28 days of their child’s birth. Breaching these conditions results in the employee being considered to have returned to work permanently, thereby forfeiting all further parental leave payments. Any further payments made to the employee are then considered to be an overpayment, which must be paid back to IR (aha, there’s the nexus!).
Temporary amendments to the parental leave legislation during Covid, have provided for employees to be able to return to work temporarily, without forfeiting any remaining leave entitlements. A qualifying employee in this regard is a ‘Covid-19 response worker’ – for reasons related to the Covid-19 outbreak, there is an unusually high demand for workers in their role, or their skills, experience or qualifications and nobody else can fill their role. Eligible employees can return to work for up to 12 weeks and then go back on parental leave.
Finally, there is the permanent return to work, which requires the employer’s agreement and at least 21 days advance notice. There are some rather sombre exceptions however, where a child is miscarried, stillborn or dies, or for whatever reason the employee is no longer the primary carer of the child.