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Neonatal leave and pay – the new law

28 June 2023

The Neonatal Care (Leave and Pay) Act 2023 received Royal Assent on 24 May 2023, providing parents with a right to 12 weeks’ leave and pay when their baby requires neonatal care in addition to existing parental leave entitlements. However, the new rights will not come into force until April 2025. We explain what the new entitlement to leave and pay looks like and what it means for employers.

Although neonatal leave has long been promised in party manifestos, it has now been introduced following government backing of a private member’s bill. The aim of the new rights are to allow parents dedicated time to spend with their baby while they are receiving medical care, without that eating into their maternity and paternity leave. The hope is that this will provide some peace of mind to parents who find themselves in this difficult situation.

Who is eligible?

This leave is intended to support employees with a parental or other personal relationship with a baby who is receiving neonatal care. The regulations will set out the eligibility criteria in detail, but it is safe to assume the eligibility will be the same as for paternity or shared parental leave i.e., the baby’s parents, married to the baby’s parent or expected to have the responsibility of bringing up the child.

The definition of neonatal care is yet to be specified but the general requirement is for the baby to receive seven days of medical or palliative care within the first 28 days of birth. We can also expect the regulations to set out whether the right to neonatal leave and pay is per child to account for multiple births.

How much leave?

The length of neonatal leave will be dependent on how long the baby spends in hospital, with parents entitled to up to 12 weeks of neonatal leave and a minimum entitlement of one week.

How much pay?

The right to neonatal care leave (‘NCL’) is a day one right requiring no set length of service, mirroring the right to maternity leave. The right to receive statutory neonatal care pay (‘SNCP’) requires 26 weeks of service and earnings on average of at least £123 a week. This mirrors the entitlement to maternity pay.

NCL must be taken in the first 68 weeks of the baby’s birth. It is expected that it will be possible to take it in non-consecutive periods of at least a week, as is the case with shared parental leave.

It is currently unclear what notice and evidence will be required for an employee to exercise this right. However, it is likely that there will be some form of medical evidence, perhaps similar to a MAT1B certificate which is currently required as proof of pregnancy.

As with other statutory leave entitlements, employers cannot penalise any employee taking NCL once it is brought into force. Dismissal of an employee for a reason connected with their taking NCL will be automatically unfair.

Employer considerations

Whilst there is a significant lead in time for this legislation in order to allow for HMRC systems to be updated, there are certainly some important considerations for employers to think about in advance:

  • Timing: An employee will always take NCL at the end of their other parental leave entitlement. For example, maternity leave cannot be curtailed to take neo-natal leave and then re-started. Instead, it will be taken at the end of maternity/paternity leave (or after the employee has returned to work provided it is within 68 weeks of birth). Whilst the underlying intention is to extend the overall period of leave that can be taken, employers may find that some eligible employees choose to curtail their maternity leave once statutory maternity pay ends at 39 weeks and then move to NCL and SNCP for 12 weeks. This would allow for almost a whole year of paid leave (albeit at statutory rates for employers who do not enhance).
  • Notice: Eligible employees may well be in the middle of an emotional and worrying time. As set out above, it is currently unknown what the notice requirements will be but employers will need to be considerate and as helpful as possible to assist employees navigating a process they may not have expected to happen to them. Employers will need to have a clear policy and offer training to HR staff.
  • Redundancy: The Act currently states that the regulations may include a provision for alternative employment to be offered in the event of a redundancy during any period of neonatal leave. We will need to wait for the regulations to see if this does appear but it seems likely given this priority status is currently offered to those on maternity/adoption/shared parental leave, set to be extended to pregnant employees and maternity returners. Given NCL will often be taken at the end of maternity/shared parental leave, if the regulations do include this protection, it could significantly increase the period of redundancy protection for an employee.
  • Enhancements: some employers have already announced early implementation of a neonatal leave and pay policy ahead of the government’s statutory scheme. It will also be open to employers to enhance any statutory payments, particularly if they do so for other parental leave.
  • Data privacy: Details of the baby’s medical conditions are private under data protection legislation. The employee’s wishes should be observed in relation to sharing information with colleagues about the reason and nature of the leave they are taking.
  • Absence management: Effects of traumatic birth or a baby spending time in a neonatal intensive care unit could manifest themselves both physically and mentally, possibly resulting in a long-term condition or illness. Employers should be mindful of this in the event of a change in an employee’s performance, behaviour or absence. Approach requests for time off or increased sickness leave carefully, bearing in mind the potential disability discrimination risks.

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