Thursday, February 9, 2017

Did you Know that Central Pays for Pregnancy and Parental Leaves?

–Bryan Tolson, Vice President

The departmental economics surrounding Pregnancy and Parental leaves under Policy 14 are a mystery to most people on campus. Chairs and faculty members planning a leave each deserve to know the economics of a Policy 14 leave as they jointly discuss and plan for one. Until we can get a concise summary of key economic impacts into Policy 14 itself, here is what you need to know:

Central, not your department, covers the salary paid out to you from UW while you are on pregnancy/parental leave.

Let me say that a different way:

The unit paying your salary retains 100% of those funds when you are on pregnancy/parental leave.


Let me make this clear by showing you what happens in my Faculty (Engineering). Let’s pretend you are a female engineering faculty member taking a full year pregnancy/parental leave:
  • The budget transfer to your department for annual operating expenses includes your regular salary and this amount is not impacted by your leave plans.
  • Assuming you earn $100K, and you are eligible for Employment Insurance (EI) in Canada, Policy 14 explains how your total income for the year on leave will work out to be $73.3K (trust me, keep reading—check the number later if you wish)
  • While you are on leave, your income comes from two sources:
    • EI income (paid to you directly from EI) for up to 55% of your salary ($55K)*
    • UW benefits, as defined in Policy 14, top up your income by providing an extra $18.3K. The UW Finance office transfers these top-up funds directly to your home department ($18.3K).
  • Note the cash flows in your department:
    • Department starts the year with funds to pay your salary (+$100K)
    • Department pays top-up funds out to you (-$18.3K)
    • Department receives top-up funds from UW Finance (+$18.3K)
  • The net impact is that your department is left with 100% of your salary ($100K) with which to replace you.
This is fundamental information everyone involved in Policy 14 leave-planning needs to understand: your leave does not hurt your department financially.

For example, consider determining the teaching load adjustment for you, the example female faculty member above, taking a year-long leave. In your case, due to the slight imprecision of birth date planning, your leave happens to span four terms (two terms completely and two partial terms). It would be reasonable (economically) for the Chair to compute your teaching load adjustment as if your official leave length was four full terms. I’ll let you work out just how reasonable this is under other Policy 14 leave lengths or under your unit’s normal teaching load. In the most general case, it will normally be reasonable (economically) for the Chair to round up fractional teaching task reductions they compute due to a Policy 14 leave.

I’ll close with some key questions the above discussion raises:
  • What happens in other Faculties? A bit unclear at the moment. What seems clear is that Central sends top-up funds somewhere. Tell us what you know.
  • What will happen in the new Waterloo Budget Model rolling out this Spring? FAUW is asking that very question. As a matter of equity for all of our faculty members, we believe that pregnancy and parental leaves must continue to be centrally funded. See also the 2012 UW Work-Life Balance report recommending the same thing (recommendations 3.1b and 4.1a). 
When the Policy 14 review eventually commences, I will ensure these questions, and many more, will be addressed. In the meantime, FAUW looks forward to hearing about your experiences.

*EI has a maximum payment which may be less than 55% of your salary but the UW benefits (top-up) cover the balance to make sure your total income reaches 95% or 100% (depending on leave length/type – see Policy 14). So for the purposes of this example, it is not important if EI pays for 55% of your salary or something less than that.

3 comments :

  1. As somebody's who struggled with navigating UW's parental leave policies, I'll just quickly note that some of the above is a bit misleading. EI is 55% up to the max insurable earnings amount of $51,300 (i.e. you're capped at $543/week). This matters because outside of UW's top-up periods (34 weeks for a birth mother, 17 weeks for a non-birth parent), income drops dramatically.

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  2. Since I was curious and fired up Excel, the faculty member who takes a full year's leave doesn't get $73,300.

    Somebody making $100,000/year would get (i.e. base salary is $1923/week):
    - $1923/week for the six weeks birth leave ($11,538)
    - $1826.92/week for the two week EI waiting period ($3653.84)
    - $1826.92/week for the 15 weeks of UW/EI integrated benefits ($27,403)
    - $543/week for the remaining 29 weeks of EI ($15,747)

    So about $58k and change, taxable. Above is based on Policy 14 Appendix B (https://uwaterloo.ca/secretariat/policies-procedures-guidelines/policy-14).

    Don't get me wrong, it's great - my partner gets EI and nothing else - but if you're budgeting for mortgages and stuff the exact numbers matter.

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  3. Thanks Ian. You are right of course. I was trying to keep details to a minimum and so did not identify the EI cap of $543 per week - this is only difference. Worth pointing out and worth an update above. Given this discussion, it would be nice if new Policy 14 language somehow linked or could identify the current weekly EI cap.

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