New parental-leave rules for fathers pose challenges for small businesses

Theglobeandmail.com
March 4, 2018
By Brenda Bouw

Small-business owners are open to the new parental-leave rules that will encourage dads to take up to five weeks off with their newborns, but worry it could be difficult to cover the short-term staffing gap.

"I love the idea of both parents being able to share five weeks of responsibility together to help the wife transition back to work and ease some of the stress," says Sharon Vinderine, founder and CEO of Parent Tested Parent Approved (PTPA) Media Inc., which offers certification of family-focused products including toys, baby gear, food and automobiles

The federal government's latest budget proposes a new five-week "use-it-or-lose-it" incentive to encourage new fathers to take parental leave, starting in June, 2019.

However, Ms. Vinderine says it will be a unique challenge from a small-business perspective.

"When someone goes on maternity leave, you understand it could be 12 or 18 months and you have time to search for someone and train them," she says. "But with five weeks, it's virtually impossible to find someone who is willing to take on that [short-term] role, get trained, and by the time they're trained, it's time for them to go."

She's also concerned about the strain on the rest of the staff, which has to take on added responsibilities. "My concern is how we would manage … given that everyone plays such a vital role in the company," says Ms. Vinderine, who has 10 employees, six of them men.

The proposed Employment Insurance Parental Sharing Benefit increases parental leave to a maximum of 40 weeks in cases where the second parent (typically the father) agrees to take at least five weeks off. The benefit covers 55 per cent of the second parent's income for as much as 12 months (with a weekly EI maximum of $547 per week). In cases where families have opted for the extended parental leave of 18 months, the second parent would be able to take as much as eight weeks of additional parental leave, paid out at 33 per cent of their income. The benefit would also be offered to adoptive and same-sex couples.

The budget proposal has been a hot topic around the water coolers and in the human-resources departments at car dealerships across the country, says Huw Williams, spokesman for the Canadian Automobile Dealers Association.

He says the implementation next year will give dealers time to prepare but acknowledges it might be challenging for these businesses to fill certain roles.

"It will be an adjustment," says Mr. Williams. "How do you staff for a position in a highly technical trade? It's not part of the labour work force pattern where you can bring someone in for five weeks to start being a trained technician in an area."

The size of the business will also matter, with smaller ones in rural areas likely finding it more difficult to replace staff as compared to large cities.

Most small-business owners don't have an issue with giving fathers or same-sex partners more time with their newborns, but it will put pressure on their operations, says Dan Kelly, president of the Canadian Federation of Independent Business.

"The challenge for us, with all of the changes that have happened to parental leave over the years, is that the impact on the employer is always the afterthought," Mr. Kelly says. "It would be nice if any government were to consider that as part of the plan – do some consultation with employers on how to make this work."

And while EI rates paid by employers and employees aren't expected to rise as a result of the change, Mr. Kelly says it is clear that rates that would have otherwise dropped won't now as a result of the extended leave. "I'm happy there isn't expected to be an additional tax burden, but it's still … forgoing rate reductions that otherwise would have happened." That's on top of Canada Pension Plan rates set to rise in 2019, Mr. Kelly says.

In a small business, in particular, each employee is considered important and if one goes on leave for five weeks it could have a meaningful impact, says Justin Thouin, CEO and co-founder of lending-rate comparison company LowestRates.ca.

"But that's a selfish view," says Mr. Thouin, whose company has 25 employees, two-thirds of them men. "Businesses need to be able to find a way to thrive and operate while allowing people to live their lives."

He says it's not much different from giving someone an extended vacation. "It takes some co-ordination and effort … but it's very doable."

At software firm Zoom.ai, founder and CEO Roy Pereira has had several employees take parental leave, mostly men. He says the dads have been given as much time as needed, within reason. In fact, they had one senior engineer take a leave on his first day of work after his wife had their first child the night before.

"Being a parent, I understood how much support my wife needed," says Mr. Pereira, who gave that employee paid paternity leave during the three weeks he took off with his new child. "I think we all realize it's not just the woman's role to take care of the child now. It's 2018. I feel it would be quite backward if we didn't offer a policy like that. … Yes, it could hurt us financially, potentially, but it creates a much better work environment. In this day and age and in our industry, having a great work environment is important to bring new talent. It's so competitive … I don't think policies like these are exceptional. They should be standard."