The Australian Government has introduced paid family and domestic violence leave (FDVL) for all employees. This will take effect for employers with
- 15 or more employees on 1 February 2023, and
- less than 15 employees on 1 August 2023.
We've compiled some information about the key changes impacting employers and employees, and are also seeking guidance from the relevant authorities about some issues that we think need to be clarified further.
The key changes impacting employers and employees in Australia are:
Entitlement changes from 5 days unpaid to 10 days paid.
New employees that commence on/after the effective legislation date get 10 days from 1st day of employment – they do not have wait for 12 months anymore.
Existing employees on the effective legislation date, will have their existing balances reset to 10 days. When their next employment anniversary falls, the balances are required to be reset again to 10 days.
This does mean some employees could legitimately access to more than 10 days paid within the first 12 months of the effective legislation date.
Leave can be taken in any quantity either continuously or not, for example 1 hour here and there or 10 days in one block or any combo in between.
FDVL supersedes other leave.
If employee is on Annual or Sick leave and they need to take FDVL, then the FDVL would replace the other leave.
There will be no difference to an employee getting sick whilst on annual leave. This means existing leave requests would need to be replaced/modified. “Other leave payments” may need to be reversed so that the other leave balances and liabilities get credited back what was replaced by FDVL.
Casual employees can take FDVL outside their rostered hours of work. But the employer is only required to pay FDVL for the days/hours they were rostered. This does not stop the employer from paying generously although they are not required to.
- To reduce risk to an employee's safety when accessing paid family and domestic leave, there are rules about information that must not be included on pay slips. Employers are prohibited from including information that shows:
- that an amount paid to an employee is a payment for paid family and domestic violence leave.
- a period of leave taken by an employee has been taken as paid family and domestic violence leave.
- an employee's paid and domestic voilence leave balance.
- Under STP, FDVL should be reported as Other paid leave (paid leave type O).
The following issues have been raised with Australian Taxation Office (ATO) and Fair Work by Digital Services Providers Australia New Zealand (DSPANZ):
Clarification on how an employer can validate an employee received their full rate of pay. For example, should it just be the planned work hours that get replaced in payroll or should all pay items be replaced with FDVP using a consolidated rate.
How 'part-day' leave is to be calculated – Especially if the employee is also entitled to incentive-based payments such as bonuses, loadings, monetary allowances, overtime or penalty rates and any other separately identifiable amounts.
Until we receive guidance from the ATO, employers should seek independent legal/financial advice on how FDVL should be paid.
To learn more about the changes, please refer to the following pages published by Fair Work Ombudsman:
Family and domestic violence leave in MYOB Exo Employer Services
Guidance is pending ATO clarification It is unclear how the ATO expects the full payment for days taken under FDVL to be accounted for. These processes assume the base rate (processed under FDVL taken) can be itemised separately from incentive-based payments such as bonuses, loadings, monetary allowances, overtime etc.
Most FDVL setup will be done for you when you update to MYOB Exo Employer Services version 2022.03. These changes will take effect as soon as you update:
- The new leave type will be added to your system
- Your employees will be credited with their initial 10-day entitlement balance
- Your employees' annual entitlements will be set up, with a fresh 10 days granted each year on the anniversary of their employment.
Note that your employees will automatically be credited with their FDVL balances as soon as you update. We recommend larger employers update straight away, but if you have less than 15 employees you can postpone updating until you're ready.
After the update, you may need to update some settings on the Leave Management Setup - New, screen, including:
- choosing a specific cost centre for FDVL
- changing the name that appears on payslips for FDVL, to help keep receipients safe.
Paying FDVL is different from other types leave, as it is measured in days and the rate is not automatically calculated. To see how to do this, go to Current Pay - FDVL.
More information on FDVL is available in Exo Employer Services Australia help: