Employers are taking early action ahead of the introduction of new employment rights legislation, a new study has shown.
Incomes Data Research (IDR) findings revealed many businesses have already improved their offering in areas such as sick pay and entitlement to paternity and parental leave as the Employment Rights Bill continues to make its way through parliament.
The independent research organisation’s poll of 168 employers’ pay intentions for 2025 found that if they haven’t already taken action, many are considering doing so in the coming year.
Around one in three employers intend to enhance their paternity pay or leave provisions or have done so in 2024, while just over one in four plan to improve parental leave or pay.
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IDR’s Maternity, Paternity and Parental Leave and Pay report released earlier this year found that more than three in five (62%) of organisations offering enhanced paternity pay policies give staff two weeks of full pay, while an additional 12% provide around four weeks of full pay. However, only 14% offer enhanced parental leave.
The research also showed that more than one in three (36%) of employers recently increased their maternity pay offering or are considering doing so, while across the economy, the median value of occupational maternity pay is 19.5 weeks of wages.
Under the proposals set out in Employment Rights Bill, the three “waiting days” currently in place under the statutory sick pay scheme will be removed and the provision will be expanded to lower-paid individuals. However, IDR’s poll suggested organisations have recently made changes to their provisions or intend to do so next year.
Its Sick Pay report, published in the autumn, showed that the value of occupational sick pay was typically around 6.5 weeks of full pay for individuals in their first year following probation, increasing to 26 weeks for those with five years of service.
But Katherine Heffernan, senior researcher at IDR, highlighted that there is considerable variation between sectors. She said: “Those working in the private services sector fare worst, typically receiving a maximum of 12 weeks’ occupational sick pay after five years, compared with 39 weeks in the public sector, 26 weeks in manufacturing and 19.5 weeks in the not-for-profit sector.”
The research found that other employee benefits employers are looking to improve include pension provision and holiday entitlement.
According to IDR’s Benefits Handbook, employers typically contribute 6.7% under defined contribution pension schemes – more than double the current statutory minimum percentage of 3% – while non-managerial staff receive around 32.2 days of holiday, inclusive of eight bank holidays. For managers, this increases to 33.5 days, including bank holidays.
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