Parental leave benefits in the private sector are declining, which could drive employees who are new parents to dip into their unemployment insurance fund (UIF) savings to supplement their income while on parental leave.
This is according to data from online remuneration and reward platform Remchannel. The platform found that the percentage of employers offering four months’ fully paid maternity leave fell from 58.5% in 2023 to 41.7% in 2025.
Lindiwe Sebesho, MD of Remchannel, told Business Times that fully paid maternity leave is a discretionary employer enhancement. Under the Basic Conditions of Employment Act, parental leave is an unpaid but protected leave of absence.
“We expect that employers will continue reviewing the cost implications of fully paid parental leave as part of their workforce planning assessments and that more employers may choose not to pay partially or in full as they are not legally obligated to pay employees during parental leave.”
A Constitutional Court ruling handed down in October 2025 said South Africa’s statutory four months and 10 days of parental leave may be shared between both parents.
“Previously, parental leave was framed mainly around the ... mother, who was entitled to four consecutive months of maternity leave, while the non-birthing co-parent received 10 days in terms of the Basic Conditions of Employment Act.
“Parental leave is now shared, meaning the ruling prescribes that the four months and 10 days can be shared by all biological, adoptive or commissioning parents as they choose,” Sebesho said.
We expect that more employers may choose not to pay partially or in full as they are not legally obligated to pay employees during parental leave
— Lindiwe Sebesho
She said birthing parents can still claim UIF maternity benefits as prescribed, but non-birthing parents, including fathers, may not yet be able to do so because the UIF Act has not been amended to allow those claims.
“Employees may now need to rely more heavily on UIF, which could place families under significant financial strain if benefits are delayed or only partly replace income. In those cases, households may have to cover the shortfall themselves while managing the added costs of a new child alongside rent, food, transport, and other everyday expenses.”
She said employers may need to plan for the possibility that some employees could have more than one parental leave event in a single year, depending on their family circumstances.
“Although employers are focused on costs, they still need to assess their broader benefits offering and overall value proposition, which enables them to attract and retain the talent they need to effectively execute their business strategies.
“If they reduce or remove fully paid parental leave, they should consider other forms of support within the benefits package for women employees in particular and to support sustainable family structures, which are an important foundation for a thriving economy.”
Business Times sent queries to the department of labour & employment about the extent to which the decline in parental leave in the private sector was driving a withdrawal of funds from the UIF, but the department did not respond.
Tabling her budget vote in parliament this week, labour minister Nomakhosazana Meth said the UIF budget was R41bn for financial 2027.
“During the 2025/2026 financial year, the UIF through TERS [temporary employer/employee relief scheme] had supported 30 companies with approximately R295m, saving more than 9,300 jobs during a period of economic pressure.
“This intervention demonstrates the fund’s critical role in sustaining businesses, protecting workers, and strengthening economic resilience.”
She said the performance of TERS has been below satisfactory. “We will strengthen operational efficiency, improve turnaround times, and enhance capacity to support companies in distress and preserve jobs. The TERS allocation for 2026/2027 is R2.4bn.”
René Richter, reward and benefits adviser at Paymenow, said South African workers have lost more than 40% of their purchasing power against essential costs, spending between 35% and 50% of disposable income on transport, fuel and utilities.
“When electricity has more than doubled, fuel keeps climbing and households face mounting financial pressure, an above-inflation salary increase no longer necessarily protects an employee’s standard of living.
“Employers are absorbing the consequences in the form of higher wage demands, hidden productivity loss, absenteeism and disengagement.”
She said cumulative electricity tariffs have risen 132% over the past 10 years, paraffin 226%, diesel 132% and petrol 86%. Over the same period, average wages across all industries have grown just 61.2%.
“Forward-looking employers are building remuneration scenarios in the same way they build financial forecasts; a growth case, a base case, a downturn case, and a crisis case, each linked to clear triggers around revenue, currency and inflation. That discipline prevents reactive, last-minute cost-cutting that damages morale and erodes trust.”
Carl Moodley, CEO at GENRIC Insurance, said SMEs face the challenge of attracting and retaining top talent while managing tight budgets.
“Traditional employee benefits packages, centred [on] comprehensive medical scheme benefits and pension funds, have long been the gold standard for corporate employee benefits. However, these conventional offerings often prove financially prohibitive for smaller businesses and even less accessible to lower-income employees.”
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