Statutory Neonatal Leave and Pay – are you prepared for the new legal right?
From 6 April 2025, a new right to statutory neonatal leave and pay will come into force, giving parents the right to time off to care for newborn children who require hospital care.
There are two elements of the right that employers need to be aware of; leave and pay.
Neonatal Care Leave
Neonatal Care Leave will be a right from day one of employment and will apply to parents whose babies are admitted to neonatal care within 28 days of birth and require a continuous hospital stay of seven or more days.
Eligible employees can take up to 12 weeks of Neonatal Care Leave, in addition to any maternity, paternity, shared parental, or adoption leave already available.
Neonatal Care Pay
Neonatal Care Pay will require the employee to have at least 26 weeks of continuous service with their employer by the start of the neonatal care period.
The Employee must earn over the Lower Earnings Limit (currently £123 per week) to be eligible.
Employees who meet these conditions will be entitled to Statutory Neonatal Care Pay for up to 12 weeks. Employers will need to calculate payments carefully, similar to other statutory pay entitlements.
The rate for Statutory Neonatal Care Pay will align with other statutory family friendly payments, so will be £184.03 (rising to £187.18 on 6 April 2025) or 90% of the employee’s average weekly earnings, whichever is lower.
What are the practical implications for employers?
HR teams should review and update parental leave policies to incorporate Neonatal Care Leave. Clear guidelines should be provided, outlining eligibility, duration, and the process for applying for leave and pay. The policy should be clearly communicated to employees so that they understand their rights.
Payroll systems must be updated to accommodate the new entitlement. Employers should ensure that Statutory Neonatal Care Pay is calculated and processed correctly. Working with payroll providers or internal finance teams will be essential to ensure compliance.
Managers play a key role in supporting employees during challenging times. Providing training on Neonatal Care Leave will help line managers understand the process, respond empathetically to requests, and ensure consistent application of the policy across the organisation.
Transparent communication is critical. Employers should proactively inform employees about their entitlement to Neonatal Care Leave and Pay. Consider including details in employee handbooks, intranet portals, and onboarding materials.
Employers should also be aware that the new right comes bundled with new rights not to be dismissed or subjected to unfair treatment because an employee exercises or seeks to exercise their right to neonatal leave and pay, so treating employees fairly and in line with the right is fundamental.
Reward
Whilst employers might be tempted to view this new law through a purely compliance lens, new family friendly laws like this one provide employers with an excellent opportunity to make a real commitment to employee wellbeing and family life.
This can improve employee loyalty and retention and heighten an employer’s reputation in the market.
Preparing for April 2025
There are a number of steps that employers can take to prepare for the introduction of Neonatal Care Leave and Pay.
Employers should ensure that they update their contracts and handbooks to include the new right to neonatal leave and pay. They should communicate the new entitlement to employees so that they are aware of their legal rights.
Employers should collaborate with payroll providers to test payroll systems to ensure readiness for statutory payments.
Employers should ensure that managers are trained regarding the new right and how to handle requests, so they remain compliant and handle any requests with the appropriate empathy and sensitivity.
Employers should continue to monitor relevant news and legal updates to ensure that they keep abreast of any developments. The new government is certainly keen on advancing family friendly rights, so watch this space for any developments it may announce to this new entitlement.
Conclusion
Neonatal Care Leave and Pay is a key new right for new parents.
It will mean new liabilities for employers and employers will have a lot of work to do, ensuring that their contracts, handbooks and payroll practices are up to date, communicating the new entitlement to staff training on new obligations to managers and ensuring that the business is compliant, it does also provide an opportunity for employers to set themselves apart from the crowd by not only complying with the law but demonstrating a genuine commitment to working parents.
Contact us to discuss how we can help you understand this new legislation and ensure that your business is not only compliant but can demonstrate that you are a supportive, forward-thinking employer that prioritises the wellbeing of its people.