In a significant development for working families, the government has confirmed the introduction of paid neonatal leave, set to come into force on 6 April 2025.
The Neonatal Care (Leave and Pay) Act 2023 aims to provide crucial support to the parents of (or otherwise those with responsibility for the care of) babies who need neonatal care shortly after their birth.
The new right to paid leave is expected to benefit around 60,000 new parents. Some employers, such as Marks and Spencer, Virgin Media and Asda, have already introduced policies allowing parents paid time off in these circumstances, however the new legislation will ensure all employers must offer paid neonatal leave.
Eligibility
Employees will be eligible for neonatal care leave from their first day of employment, in line with recent changes to other types of paid family leave. The baby must be born on or after 6 April 2025 for the right to neonatal care leave to apply.
The employee will require at least 26 weeks’ continuous service with their employer, and to meet the minimum average earnings threshold of £123 per week, in order to qualify for paid leave.
In addition, the employee must be:
- one of the baby’s parents;
- one of the baby’s intended parents (in surrogacy arrangements);
- the partner of the baby’s mother (provided they live with the mother and there is an expectation they will be responsible for raising the baby; or
- one of the prospective parents of an adopted baby.
Notice requirements, leave and pay
Eligible parents can take up to 12 weeks of neonatal leave, in addition to other statutory leave entitlements such as maternity, paternity, and adoption leave. The leave can be taken in non-continuous blocks within 68 weeks of the baby’s birth. This extended period is designed to ensure that parents can be with their newborns during critical early stages, without the added stress of work commitments.
The leave applies to parents of babies admitted to neonatal care within the first 28 days of life, with a continuous hospital stay of at least seven days. Employees may not take neonatal leave until the day after that seven-day period.
The pay will be at the statutory rate (expected to increase to £187.18 in April 2025), similar to other statutory family leave payments. This ensures that while parents are on leave, they still receive financial support, albeit at a reduced rate compared to their regular earnings (unless the employer opts to provide an enhanced rate of pay).
The new legislation outlines two distinct phases for neonatal care leave. The first phase, "Tier 1", starts when the child begins neonatal care (after the seven-day qualifying period) and concludes seven days after the care ends. During this phase, leave can be taken in non-continuous blocks of at least one week. The second phase, "Tier 2", covers the remaining part of the 68-week period and requires the leave to be taken in one continuous block. Notice requirements differ between the two tiers, with Tier 1 having a shorter notice period. However, both the employer and employee can agree to waive these notice requirements.
Implications for employers
Employers will need to update their family leave policies to incorporate the new neonatal leave provisions. This includes ensuring that HR systems and payroll processes are equipped to handle the new leave and pay entitlements. Employers should review their current policies and make necessary adjustments to comply with the new legislation ahead of 6 April 2025.
Employers should consider communicating these changes to employees, particularly those in managerial and HR roles. Training sessions may be necessary to ensure that staff understand the new rights and how to administer them effectively.
Additionally, employers will need to navigate the complexities of overlapping leave entitlements. With the introduction of neonatal leave, employees may now be entitled to multiple types of leave, such as maternity, paternity, and shared parental leave. Employers should ensure they have clear policies in place to manage these overlapping entitlements and to avoid any potential conflicts or misunderstandings.
Chelsea Feeney