Sick leave increases could cost ECE centres extra $24 million a year

03 December 2020

A recent Early Childhood Council survey found the proposed increase in minimum sick leave entitlement could cost the early learning sector an additional $24 million a year, with no indication of where the money will come from.

“As a sector that relies on government subsidies to operate, increases to minimum sick leave entitlements will impact centres’ balance sheets significantly. Any centre manager reading that number will be concerned,” said ECC CEO Peter Reynolds.

Now, 51% of ECC members surveyed* offer their team five working days sick leave a year, while 35% already allocate ten.

For a typical centre with 17.5 employees across all roles, the bump to ten days minimum sick leave will cost an extra $16,918.74 a year per centre.

Multiplying that by the 1,400 centres affected, we estimate the proposed sick leave changes could land an almost $24 million additional cost on the early learning sector as a whole.

“The government has not indicated how this increase imposed on small businesses will be funded. For centres who depend on government subsidies to cover most of their costs, the only other source of revenue is parent fees, for those who charge them.”

“Combine this with the multiple Pay Equity claims and shortfalls on the Pay Parity increases, and the financial pressure will become too much for some. ECE centres are not ATM’s – we’d like the government to consider the cumulative effect of these issues and do the decent thing,” said Mr Reynolds.

* Numbers are based on a 2019 ECC salary and wages survey of its membership. Responses closely mirrored the ECC membership profile of 73.26% privately-owned centres and 26.74% community-owned, which generally align with the number of licensed ECE centres reported on the Ministry of Education’s Education Counts website.

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