New proposals for increasing parental leave pay in stages over the next 10 years will cause “an administrative headache” for HR functions, the CBI has warned.
Yesterday the Equalities and Human Rights Commission (EHRC) called for greater parity between maternity and paternity leave by 2020 to enable fathers to spend more time with newborn children and encourage mothers to get back to work earlier after childbirth, and so eradicate the gender pay gap.
The Commission called on the government to offer fathers 90% pay for their initial two weeks leave at the birth of their child, and mothers 26 weeks on 90% pay rather than the current six weeks. The equality watchdog also proposed four months of parental leave – after the mother’s initial six months leave – which either parent can take, with at least eight weeks at 90% pay.
The strategy could be implemented over 10 years, by 2020, and would cost the government an extra £5.3bn on top of the current £2.07bn cost for parental leave policies, the EHRC said.
But Katja Hall, the CBI’s director of HR policy, told Personnel Today the provisions “would cause an administrative headache” forcing HR functions to overhaul pay systems three times over the 10-year period to meet the three stages of proposed implementation.
This, coupled with the need to establish communication links between the mother’s and father’s employers, would be “extremely costly” for companies.
She said: “While this report raises some interesting talking points, the proposal to introduce paid parental leave to be shared between parents would be complex and costly for companies to administer.”
She added that with the current state of public debt, the government should instead prioritise flexible working programmes.
“Given the alarming state of the public finances, these plans, which would cost taxpayers an extra £5.3bn, are unaffordable. It makes far more sense to focus on encouraging flexible working, which is open to both parents but does not materially increase costs for business and the taxpayer” she said.
But Jeannie Drake, the EHRC’s commissioner of the report, said that despite the recession and rising public debt, now was the right time for the government to act on parental leave.
She said: “Far from retrenching, it’s really important to move forward with this agenda. You can’t dodge this kind of issue; we are absolutely clear that this is a radical agenda that we should stay with.”
Drake added that the proposed changes to parental leave would help reduce employer discrimination against women and the gender pay gap.