One employer in five enhances shared parental pay

One-fifth of employers have decided to enhance their shared parental pay, while the same number remain undecided. This is according to comprehensive research published days before the shared parental leave regime moves into full swing. Michael Carty presents the results.

Whether or not to enhance shared parental pay beyond the statutory minimum (£139.58 per week or 90% of earnings if less) is a key decision for employers formulating a policy on the new right.

According to an XpertHR survey on shared parental leave arrangements, only 39% of organisations have a shared parental leave policy in place. Most employers (57%) plan to introduce a policy within six months, but 4% have no plans to introduce one.

The Shared Parental Leave Regulations came into force on 1 December 2014. Working couples with babies due on or after 5 April 2015 can share the leave and pay remaining when the mother ends her maternity leave. Similar arrangements apply for adoptive parents.

While a majority of employers have, or will soon have, a shared parental leave policy in place, only half believe that they have made all the necessary preparations for the new right.

Cost concerns

The cost implications of shared parental leave are a concern, particularly for small businesses. One-third of small employers (with fewer than 250 employees) said that shared parental leave will prove costly for their organisation.

A key cost issue is whether or not to enhance shared parental pay beyond the statutory minimum; parents on shared parental leave can share up to 37 weeks’ statutory shared parental pay between them.

Any decision to offer enhanced shared parental pay could have major cost implications for the organisation if take-up of shared parental leave is high. Yet four-fifths of organisations surveyed by XpertHR say they do not have a sense of the number of employees that may take shared parental leave over the next 12 months. This means that the likely cost of offering enhanced shared parental pay is an unknown quantity for many organisations.

Surveys among employees are suggesting a much higher take-up of shared parental leave than originally anticipated by the Government. A large-scale government survey revealed that two-thirds of fathers would consider discussing shared parental leave with their employer. And, according to research by law firm Irwin Mitchell, 49% of couples believe they would be better off financially if they shared their parental leave following the birth of their child.

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Across the whole economy, two-thirds of employers currently enhance maternity pay. It is near-universal among public-sector respondents, but is offered only by around half of those in the private sector.

The research was conducted in March 2015 and is based on responses from 575 organisations with a combined workforce of 2.2 million employees.

• XpertHR Benchmarking subscribers can access and drill down into the full results of the survey and generate bespoke reports on how their organisation compares.