How To Set Up A Recurring Parental Leave Top Up

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Congrats! Your employees' families are growing, which can be an exciting and nerve-wracking time in their lives!

As an employer, supporting your employees through this exciting time can enhance their well-being and loyalty to your company. There are many ways to help them, but providing a parental leave "top-up" is one of the best ways. This top-up supplements the EI benefits, which helps reduce the gap between the EI payments and the employee's regular earnings.

This article will guide you through implementing and managing a Parental Leave Top-Up Policy in your organization, ensuring a smooth process for your employees and your business.

How To Set Up A Recurring Parental Leave Top Up

A parental leave top-up will be paid using a custom income type. Once this income type is set up, you can set it as a recurring payment.  

Employees Must Remain Active On Payroll

When employees go on leave, their compensation stops, but they must remain on the payroll to receive their top-up. For hourly employees, you'll just enter zero hours on their payroll while on leave.

However, since salaried compensation has insurable hours that cannot be overridden, there's an extra step to complete for your salaried employees: adding hourly compensation to keep them active on the payroll without insurable hours. You can set the hourly pay rate of this new compensation to any amount because it's irrelevant since you won't actually be using it to pay the employee.

Now that the salaried employee has an hourly compensation set up, you can enter zero hours on payroll while they're on parental leave. This allows them to remain active on the payroll without receiving payment through this compensation. Learn how to add a new compensation for regular pay here.


Create a Custom Income Type

As mentioned, the parental leave top-up will be paid using a custom income type. 

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Custom income types are created by Humi upon request. Submit your request for a "Parental Leave Top Up" income type, and we'll set it up and notify you when it’s ready. This article provides a step-by-step guide.

Once the new income type has been added to Humi, you can set it as a recurring payment to automate future payments. 

That's it! You can now review and run payroll accordingly.

Do You Prefer Doing A Lump Sum Payment?

You can use an off-cycle pay to pay the parental leave top-up as a one-time lump sum. Learn how to create an off-cycle pay here.

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