Study: Employer top-ups to paid maternity and parental leave

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In 2008, one in five mothers (more than 51,000) who received maternity or parental benefits from either the federal Employment Insurance (EI) or Quebec Parental Insurance Plan (QPIP) also collected top-up payments from their employers. This proportion has remained stable over the past decade.

After the arrival of their babies, most employed mothers receive EI or QPIP benefits that replace a portion of their previous earnings. Some employers provide parents on leave with payments from a Supplemental Unemployment Benefit plan, commonly known as a "top-up."

The top-up for these mothers averaged $300 per week. As a result, in 2008, employers paid more than $290 million for this discretionary benefit for mothers on leave.

These supplemental benefits lasted an average of 19 weeks, which has remained constant since 2000. 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. Thus, the top-up period is shorter than the duration of public benefits for most recipients.

Mothers working in the public sector were significantly more likely than those in the private sector to receive an employer top-up, and for a longer average period of time. About 48% of those in the public sector received a top-up for an average of 22 weeks. This compares with 8% of those in the private sector for an average of 12 weeks.

Mothers working in large companies of more than 500 employees were nearly three times more likely to be offered top-up payments than those in smaller companies. 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 per hour.

Of the mothers who had returned or planned to return to work, those with EI/QPIP 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.

Most employer top-up plans require a written agreement to return to employment within a specified time and for a minimum period of time. Within 18 months of the birth of their child, the vast majority (96%) of mothers with paid benefits and a top-up had returned to work for the same employer. This compares with 77% of mothers with paid benefits and no top-up, and 46% of mothers without either.

Note: This study used data from the Employment Insurance Coverage Survey to examine which mothers were likely to receive a top-up and whether the benefit influenced return-to-work behaviour. The results exclude the self-employed and unpaid family workers. The survey did not collect top-up information for fathers.

Definitions, data sources and methods: survey number 4428.

The article "Employer top-ups" is now available in the February 2010 online edition of Perspectives on Labour and Income, vol. 11, no. 2 (75-001-X, free), from the Key resource module of our website under Publications.

For more information, or to enquire about the concepts, methods or data quality of this article, contact Katherine Marshall (613-951-6890; katherine.marshall@statcan.gc.ca), Labour and Household Surveys Analysis Division.