With new neonatal care leave and pay entitlements coming into effect in April 2025, Kavitha Sivasubramaniam looks at how and why employers should prepare for them now.
Nearly three years after proposals were first raised in parliament, The Neonatal Care (Leave and Pay) Act 2023 will finally become effective from next April.
The policy, which is designed to support employees who have parental or a personal relationship with a baby needing neonatal care, will mean those eligible can take at least one week and up to 12 weeks of paid leave. This will be in addition to other entitlements such as paternity, maternity and shared parental leave.
Welcoming the development, Catriona Ogilvy, founder of premature baby charity The Smallest Things, which led the campaign for neonatal leave and pay, says: “This new legislation will mean so much to families, giving them the emotional and financial support they need at a time of great stress and trauma.”
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She argues that no parent should be sitting next to an incubator or neonatal cot worrying about work and pay, highlighting that many parents currently return to work while their baby is still in hospital, with some mothers using up a significant portion of their maternity leave while their baby is in the neonatal unit.
“This impacts on the health and wellbeing of both parents and baby, and reduces the chances of a successful return to work,” explains Ogilvy.
Research by The Smallest Things found that returning to work was not possible for 11% of parents due to their own medical needs and 16% of parents because of their baby’s ongoing needs. However, the extra time granted by the Act will now help more parents return to work after the trauma of neonatal intensive care and the ongoing impact of a premature birth.
Simon Kelleher, head of policy and influencing at Working Families, which worked with Stuart McDonald MP on the bill when it was going through parliament, also thinks the new Act is a step in the right direction.
He says: “At the moment it’s such a lottery for employees as to whether or not they will be entitled to leave or pay depending on what their employer offers, but it’s really important that people are supported at the time any issues arise.
“Offering paid leave can be difficult for smaller employers, so the provision of statutory pay is great. It’s broadly pretty generous.”
He adds that Working Families was pleased to have helped change and expand the eligibility criteria for the policy to help reach more lower paid women.
Entitlements and eligibility
Under the Act, the time off must be taken in full weeks, in line with other statutory parental leave, from the time the baby has been in neonatal care for seven continuous days up to a maximum of 12 weeks.
Entitlement is available: where a baby has remained in neonatal care within 28 days after birth and been there seven or more consecutive days; to each parent individually, so the 12 weeks is per person; as a day-one right, subject to providing the required notice; to parents who meet continuity of service and employment and earnings tests; in two tiers.
To be eligible, the parent must also be an employee, have responsibility for the upbringing of – or main caring responsibilities for – the child in neonatal care, have given correct notice to their employer and have a child meeting the relevant requirements regarding neonatal care.
Karen Lough, director of people at HR software provider Ciphr, thinks the leave is likely to be really valuable and will help to reduce the financial strain for some employees, but says there are still people who may not get the support they need.
She says: “Bringing in this legislation will go some way in evening out this playing field. However, those who earn below the earning limit may not qualify, and the period that is covered is not very long.”
Lough also recognised that the provisions, like many other employment rights, do not extend to the self-employed.
For organisations, she points out that there are the financial and operation impacts to consider.
“HR and employers can really make a start on this now by also thinking about other things they can bring in. There are loads of resources out there,” Lough says.
Legal considerations
Elaine Huttley, national head of employment law at Irwin Mitchell, stressed that while the Neonatal Care (Leave and Pay) Act 2023 has been on the statute books since May 2023, further regulations are needed in order to understand the finer details about how it will actually work in practice.
“For example, we will need to understand any notice employees will need to give of their intention to take the leave as well as what evidence they will need to provide,” she explains.
“Employers will ultimately need to act before the new right takes effect by updating employee contracts (as it is a paid entitlement) and introduce a new policy to detail how the right works. However, it is a bit too early for employers to take firm steps just yet. Once we have the regulations with further information, employers can then really start to get prepared for the new duty.”
Once the right is in force, it will apply to all employers and employees will be protected from being subjected to a detriment because they took or sought to take neonatal care leave. Employees (regardless of their length of service) will also have additional protections from being unfairly dismissed if the reason for the dismissal is connected with the fact that they took, or sought to take neonatal care leave.
Huttley says: “A dismissal of this nature will fall within the ‘automatically unfair dismissal’ category. Consequently, all organisations need to be aware of this new right and keep up to date with any developments in this area.
Kate Palmer, employment services at Peninsula, agreed, highlighting that a number of case law examples from 2024 have shown the negative consequences that can happen when employers get this wrong.
She says: “As a new type of statutory leave and pay, employees taking this leave will be protected from dismissal and / or detriment in relation to taking, or seeking to take, this leave.”
From a software perspective, Lough believes it could be “a bit of minefield”.
“Familiarise yourself with it now, including the eligibility criteria, and understand any nuances,” she advises. “Whatever records you keep, consider if you need to update HR platform to ensure its ready.”
Extra support
Looking beyond the new Act, employers should be aware that families who experience prolonged periods of time in hospital face mounting costs associated with hospital stays. With neonatal leave and pay capped at 12 weeks and paid at a statutory rate, many families will still be forced to return to work too soon, according to Ogilvy.
She says: “The leave does not take into account the developmental needs of a baby born prematurely, or the ongoing appointments, medical interventions and readmissions to hospital that occur after coming home from neonatal care. And it doesn’t allow additional time for parents to recover once home and to be able to bond with their baby.”
Ogilvy believes that employers can support staff to return to work following a neonatal stay by understanding that babies born prematurely or sick can have ongoing medical needs are frequently re-admitted to hospital and may require regular hospital appointments or check-ups. They should therefore consider requests for formal and informal flexible working patterns and additional paid or unpaid leave.
As well as offering forms of flexible working, such as allowing more home working or hybrid arrangements and flexing of hours, paid parental leave or care days would also be beneficial, according to Kelleher. Letting employees know about existing rights and entitlements, such as unpaid parental leave, can help too.
He says: “A bit of understanding from managers goes a long way. Giving people space but also letting them know you’re there when they’re ready is so important, and that doesn’t cost anything.”
And while the Act has been broadly welcomed, some argue it doesn’t go far enough and should have a wider reach.
Ogilvy says: “We encourage employers not to wait and to make a change now, and we ask them to go above and beyond the new statutory requirements in supporting staff who have had a neonatal stay.”
Huttley explains that as there will be eligibility criteria and a maximum amount of time that employees can take as neonatal care leave, for some, they may feel that this does not go far enough depending upon their individual circumstances.
She says: “Employers can choose to introduce a contractual right before April 2025, and/or offer more generous leave and pay; they must however ensure that they comply with the statutory right, once in force.”
Publishing group Reach made the decision to implement an enhanced neonatal leave policy in 2022, providing 12 weeks of extra paid leave for either parent when their baby arrives early and needs neo-natal care.
Its group HR director Julia Warren explained the company was really pleased to have done so and will continue to publicise this among our employees.
“This is really important to us as we want to support all new parents to participate actively in those crucial early weeks and months of their child’s life, during a time that can be both challenging and exciting for many families,” she explains.
Early action
While the new entitlements aren’t due to take effect until next year, employers don’t need to wait until their introduction – they can make a difference now, insists Ogilvy.
The Smallest Things Employer with Heart Charter calls on employers to make changes now and encourages them to go further than the new statutory requirements by extending leave on full pay for parents and partners who have had a premature baby by the number of days their baby is born before their due date.
She adds: “We encourage employers not to wait and to make a change now, and we ask them to go above and beyond the new statutory requirements in supporting staff who have had a neonatal stay.”
Kelleher thinks offering support not only alleviates a lot of stress for employees, but also benefits employers too.
“The new provisions will really provide a great sense of relief for parents. Employers should also think about the longer-term impact and sense of resentment that could build up if people don’t feel they’re being treated sympathetically at a stressful time, which will lead to disengagement.”
Palmer adds: “By enshrining the right for parents of very poorly babies to take paid leave to care for them, the law is going some way in providing support for these employees. However, employers can go beyond what the law requires, when it does come into force, by offering their own support through services such as employee assistance programmes. They can also provide their own forms of neonatal care leave, before the new right comes into law, and enhanced rights when it does.”
Warren believes that offering enhanced provisions is good for employers, as well as their workforces.
She says: “We know that when employees feel supported during major life events, they are more likely to return to work more focused and motivated, and more likely to remain with the company. So, we would encourage other workplaces to provide enhanced neonatal leave as it’s good for families and helps foster a more inclusive culture.”
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