The legal aspects of the new rights to shared parental leave have been scrutinised at length, but how can HR and payroll systems support your organisation’s approach to the new right? Employment lawyer Andrew Chamberlain and HR and payroll software expert Heather Vitty discuss.
With so much controversy in recent months surrounding the calculation of holiday pay, it is unsurprising that this topic has dominated HR and payroll headlines. Industry professionals are keen to see how unfolding case law will play out and comply with the latest rulings.
Shared parental leave resources
While many people feel that uptake will be slow, the time for businesses to give it some serious thought is now. It is important to harness an understanding of what the legislation entails, what the possible impact will be, and how shared parental leave (SPL) will be tackled in practice, by HR, payroll and line managers.
As with any major change, preparation is key, as is the need to devise robust, efficient processes that will underpin an employer’s approach moving forward. The role of technology should also not be underestimated.
Have we been here before?
If we cast our minds back to when the pensions reform was first announced, we probably recollect a comparable mist of uncertainty. The overall benefits of pensions auto-enrolment were widely appreciated, but its inherent complexity and the potential administrative burden raised concerns among employers.
Reputable software vendors worked hard to develop technology that would support HR and payroll teams with the adjustments that they needed to make.
The focus was largely the formation of best practice processes that would ensure the right tasks were carried out by the right people, at the right time. This would safeguard compliance, while minimising the likelihood of professionals being pulled away from the core elements of their roles – namely looking after and remunerating staff.
Fast-forward to the preparatory SPL phase we currently find ourselves in, and the environment is not too dissimilar.
Understanding the new rights
Employment lawyers are currently busy dissecting SPL rights with clients who have approached them for advice. An eligible employee whose baby is due on or after 5 April 2015 has the right to end her maternity leave early (after her two weeks’ compulsory leave), and share the balance of her maternity leave (up to a maximum of 50 weeks), with her eligible partner.
On the face of it, this is not difficult to digest. But unsurprisingly, there is more to it. It is therefore important that businesses dig a little deeper to understand the ins and outs of SPL, before considering their approach to discontinuous leave, shared parental pay (ShPP) and the resulting administration.
Armed with greater knowledge, organisations can begin to consider how they will tackle the processes associated with SPL, and this is where technology can help.
Using technology intuitively
For years some businesses have considered HR and payroll software platforms as merely electronic filing cabinets that store employee information, and there are certain systems for which this description is fair. But there are also dynamic, intuitive and flexible technologies that can become valuable business management tools during periods of change.
These systems can manage time-consuming administrative tasks that would otherwise prove costly, while ensuring effective communication throughout.
For example, once employment advisers have helped employers to draft their shared parental leave policy – along with other key supporting forms and guidance – such documents can be stored centrally and made easily available for all.
The self-service element of an employer’s HR software system is an obvious aide here. Both managers and prospective parents can gain easy access to important resources. Self-service will also help employees review elements such as their continuity of employment and historic average earnings (if online payslips are available), making it even easier to assess their SPL eligibility.
From here, it is possible to build workflows (carefully pre-configured processes or authorisation routes within HR and payroll software). They can guide an employee through the SPL request process, while supporting line managers who need to be equally “clued up” on what to expect. The more informed everyone is, the less HR and payroll teams will be distracted from their jobs.
Keeping line managers informed
Some technology providers will have gone as far as to build screens within their system. A “notice of intention” screen or similar, will allow a prospective parent to inform their line manager of their due date and partner’s details, in case they wish to take SPL.
This screen could also facilitate the submission of an eligibility declaration. A workflow may then be triggered that maps out the necessary next-step actions, such as “book a meeting with line manager”.
Another screen could allow employees to state: the number of weeks’ maternity leave taken; the number of SPL weeks available; how much SPL the employee intends to take; and an indication of when.
Just as with a holiday request, the line manager will then be alerted. Validation rules will work behind the scenes to track an employees’ utilisation of requests for up to three blocks of continuous leave. This helps the manager determine if the request is legitimate – if so, they must just acknowledge receipt. It will also show the employee the status of their remaining SPL entitlement.
At all times, the employee can monitor what stage they have reached in the SPL process using the software. Forms, communications and meeting notes can also be recorded. To a certain extent, this means the software can be used as an engagement tool – it keeps everyone in the loop, and prompts people to talk to one another when they need to.
Tackling discontinuous leave
It is important to remember that requests for a period of broken or discontinuous leave can be refused. However, if they want to look at the operational feasibility of a discontinuous leave request, managers can use software to access team planners and analyse the extent to which colleagues could cope if the parent was absent for broken periods of time.
Assuming that the periods of leave are finalised, there is then the question of pay. A survey by Personnel Today in August 2014 found that most organisations that offer above-statutory maternity pay will also enhance shared parental pay, while further research has shown that employees are more likely to take up the right if pay is enhanced.
Regardless of when the parent takes their SPL and what level of ShPP an employer offers, staff need to be remunerated accurately and on time.
Consequently, payroll software must be more robust than ever to cope with the variable elements that come with SPL.
At the very least, there should be a closely aligned working relationship between payroll and HR. The seamless flow of precise information is paramount to ensure compliance and meet employees’ needs. Plus, with the introduction of additional and unfamiliar business processes, employers should be striving to reduce data entry duplication and unnecessary admin.
If HR and payroll functionality lies within the same system, an individual’s hours and pay entitlement can be extracted from HR and their pay calculated automatically. The information can be fed through to the payroll team with one or two simple clicks, and the necessary funds deposited when due.
Technology does not just offer help in relation to the efficient management of administrative processes, it can encourage organisational proactivity too.
For example, it can prompt a line manager to consider the potential operational impact of shared parental leave, whether it is a father or mother who will be absent from work. By running “what if” queries through the HR software – a function that more intuitive systems include as standard – managers can conduct competency-based employee analysis.
This helps to identify if there is a need to recruit temporary staff or pull employees from different departments. If there is, workflows can guide the manager through what to do next. Without this functionality, succession planning may be more difficult.
Ultimately, SPL provides parents with an opportunity to manage their childcare to best suit their family. After all, stereotypical “breadwinner vs stay at home” parental patterns do not apply to every household. Added to that, getting a hold on SPL could offer employers a chance to better support, motivate and retain staff.