Report to: General Committee Date
Report Authored:
SUBJECT: Pregnancy and Parental Leave Supplemental Income Program
PREPARED BY: Caroline Long,
Compensation and Benefits Specialist (ext 2854) and
Nadine Daley,
Manager,
RECOMMENDATION:
1) That Council approve the Pregnancy and Parental Leave Supplemental Income Program as outlined in this report and in Appendix A; and further,
a) That the Pregnancy and Parental Leave
Supplemental Income Program be effective
b) The benefit be made available to all permanent
non union staff already in receipt of Employment Insurance Pregnancy and Parental
Leave benefits; and further,
c) The Pregnancy and Parental Leave Supplemental
Income Program be provided for a 27 week period; and further,
d) The Corporation offer a Pregnancy and Parental
Leave Supplemental Income Program to a level of 75% of regular straight time
wages; and further,
e) That the Corporation implement a mandatory Return
to Work policy relating to those individuals benefitting from the program; and
further,
2) That Staff be authorized and directed to do all things necessary to give effect to this resolution.
PURPOSE:
The purpose of this report is to obtain Council approval to introduce a Pregnancy and Parental Leave Supplemental Income Program for permanent non-union staff.
BACKGROUND:
The Ontario
Employment Standards Act provides for a Pregnancy leave of 17 weeks, and a Parental
leave of 35 weeks up to a combined maximum of 52 weeks. The Employment Insurance (EI) program
provides Pregnancy and Parental Benefits as a means of income replacement up to
55% of an employee’s average insurable earnings. In 2010 the EI pre-tax maximum
of such benefit was $23,764.
The program is divided into three periods: 1) a 2 week unpaid
qualifying period; 2) a 15 week paid Pregnancy leave period; and 3) a 35 week paid
Parental leave. As it relates to
employees of the Corporation a maximum of $23,764 represents approximately 15%
of earnings for senior professionals and managerial employees.
The Corporation currently provides five (5) days of paid
leave following the birth or adoption of a child to male and female employees. Presently, no other means of income
replacement is included in the Corporation’s benefit offerings.
OPTIONS/ DISCUSSION:
As a best
practice, organizations align compensation with broader organizational and
human resources objectives. The Corporation has an opportunity to mitigate the
adverse financial impact on employees when they take a Pregnancy or Parental leave. Most recently a number of professional staff
have raised concerns regarding the absence of this benefit.
To that end
- 50% of comparable municipal and
regional employers offer a Pregnancy and Parental Leave Supplemental
Income Program.
- There is a variation in the level
of income replacement ranging from 55% to 95% of regular straight time
wages.
- There is a variation in the
duration of the benefit offering from 15 to 27 weeks.
- Some organizations elect to tier
the benefit, providing for income replacement at 95% for the first six
weeks of leave and reduce the level of income replacement to 55% for the
remaining 11 weeks.
- Within the comparator group the
most common offering consisted of income replacement to 75% of regular
straight time wages for a period of 27 weeks.
- Since 2004, 35 permanent non-union
employees have utilized Pregnancy or Parental leave provisions.
A further comparison of the Corporation’s overall benefit
offerings to the comparator group was conducted. The findings revealed that the Corporation
led the market in terms of private hospitalization and prescription drug
coverage and matched the market with respect to Extended Health, Dental and
OMERS benefits. However the Corporation
lagged in the area of a Pregnancy and Parental Leave Supplemental Income
Program.
Based on the aforementioned findings and the Corporation’s
experience, the following have been identified as recommendations:
a) That the income replacement program be
effective
b) The benefit be made available to all permanent
non union staff. This approach aligns
with employer of choice positioning.
c) The Pregnancy and Parental Leave Supplemental
Income Program be provided for a 27 week period. This duration of the benefit
was the most commonly reported amongst the comparator group.
d) That the Corporation offer a Pregnancy and
Parental Leave Supplemental Income Program to 75% of earnings. Income supplement at this level was the most
commonly reported amongst the comparator group.
Further, this is consistent with the Corporations other income protection
benefits.
e) That the Corporation implement a mandatory Return
to Work policy relating to those individuals benefiting from the program. The policy would require an employee to
return to the Corporation for a period of no less than one year. In the event an employee does not return to
the Corporation, full repayment of the benefit earned would be required. Where an employee returns for a period of
less than one year, a repayment of the benefit would be on a pro-rated basis.
FINANCIAL
CONSIDERATIONS AND TEMPLATE:
A costing analysis was undertaken to determine the financial
implications of providing a Pregnancy and Parental Leave Supplemental Income
Program. A five (5) year historical
analysis revealed that this program implemented as described above would have
cost the Corporation $651,821. This cost
is based on actual salaries for the thirty-five (35) permanent non-union
employees who have been on a pregnancy and/or parental leave since 2004.
It is difficult to predict, within the non-union group, who will apply
for a Pregnancy and/or Parental leave in the future. However, an estimate can
be made based on the following:
|
2009 Average annual
non-union salary |
$87,777 |
|
2009 Average weekly
non-union salary |
$1,688 |
|
EI 2009 weekly maximum payment |
$ 457 |
|
1 week of pay at 100% |
$1,688 |
|
1 week of pay at 75% |
$1,266 |
|
15 weeks of Pregnancy Leave pay - difference between 75% and the EI payment of $457 |
$12,135 |
|
10 weeks Parental Leave pay - difference between 75% and the EI payment of $457 |
$8,090 |
|
Total cost per employee |
$21,491 |
|
Total cost for an average of six (6) employees |
$139,076 |
The cost to provide the Pregnancy and Parental
Leave Supplemental Income Program to employees who, on
For 2011 and beyond, the costs will be included as part of the budget
process.
HUMAN RESOURCES CONSIDERATIONS
Not applicable
ALIGNMENT WITH STRATEGIC PRIORITIES:
None.
BUSINESS UNITS CONSULTED AND AFFECTED:
Finance
RECOMMENDED
BY: ________________________ ________________________
Sharon
Laing, Director John
Livey,
ATTACHMENTS:
Appendix A - Pregnancy and Parental Leave Council Presentation