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Kendra von Hahn holds her eight month old son Clark at the family home in Langley, B.C. (Lyle Stafford/Lyle Stafford for The Globe and Mail)
Kendra von Hahn holds her eight month old son Clark at the family home in Langley, B.C. (Lyle Stafford/Lyle Stafford for The Globe and Mail)

Employer maternity leave top-ups rare Add to ...

Few Canadians get extra payments from their employers while on parental leave, even though it appears a useful strategy for retaining workers.

Just one in five mothers on parental leave also got top-up payments from their employers in 2008, a proportion that's little changed over the past decade, a Statistics Canada paper released Wednesday said.

Of mothers who did get a supplemental income from their workplaces, the average top-up was $300 a week. As a result, employers paid more than $290-million for this discretionary benefit for mothers on leave.

Yet the extra cost may help employers retain staff. Most employers with top-up plans have a written agreement asking staff to return to their jobs within a specified time and for a minimum period of time.

Within 18 months of the birth of their child, the vast majority, or 96 per cent of moms with paid benefits and a top-up, returned to work for the same employer. This compares with 77 per cent of mothers with paid benefits and no top-up, and just 46 per cent of mothers without either.

Thus employer top-ups "act as a strong incentive for women to not only return to the paid work force, but also to stay with the same employer," said the report's author, Katherine Marshall.

Most new mothers (about 85 per cent) are employed before giving birth, and thus are eligible for benefits from either federal or Quebec maternity and parental leave programs. But since those benefits cover only part of earnings - up to 75 per cent in Quebec and 55 per cent in the rest of Canada - most households see a reduced incomes during the work absence.

The costs of parental leave can go beyond short-term income losses, Ms. Marshall noted.

"Birth-related employment absences may result in missed training opportunities, promotions and the accumulation of work experience, which might explain some of the persistent earnings gap between women with and without children," she wrote. "Long career interruptions of three or more years have been shown to be a significant factor linked to the 'motherhood earnings gap'."

Top-ups could indirectly boost long-term earnings since they often stipulate a return to employment within a specified time, thus encourage job continuity, she added.

Top-ups tend to last about 19 weeks, a length that's remained constant since 2000 and is well short of the duration of public benefits for most people.

"Even though the duration of parental benefits increased from 10 to 35 weeks starting in 2001, there was no corresponding increase in the duration of top-ups," the study said.

Public-sector workers are far more likely to get extra income, and get it for a longer period of time. Almost half, or 48 per cent of those in the public sector received a top-up for an average of 22 weeks. Just 8 per cent of those in the private sector got a top-up for an average of 12 weeks.

Mothers working in large companies were nearly three times more likely to be offered top-up payments than those in smaller companies. And women in Quebec were much more likely to receive a top-up than those living elsewhere, as were those with a wage of at least $20 an hour.

Moms with top-ups take more time off. Of the mothers who had returned or planned to return to work, those with federal employment insurance or Quebec Parental Insurance Plan benefits and an employer top-up were on leave for an average of 48 weeks. Those without a top-up were on leave for 46 weeks.

Both periods were "significantly longer" than for women without paid leave benefits, who returned after an average of 34 weeks, the report said.

The results exclude the self-employed and unpaid family workers, and the survey didn't collect top-up information for fathers.

Studies suggest a surge in recent years in the availability of parental leave top-up payments for both fathers and adoptive parents.

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