NEWS & INSIGHTS

Neonatal Leave and Pay Effective from 6 April 2025

JMW LLP

The Department for Business and Trade have announced that the right to leave for employees with babies in neonatal care will be available from day one of employment from 6 April 2025. The right to statutory pay during this time will be available to eligible employees who meet the service and earnings criteria. This comes after the Neonatal Care (Leave and Pay) Act (“NC(LP)A”) received Royal Assent in May 2023.

The current position is that if an employee’s baby requires specialist neonatal care after birth, they have no specific statutory right to leave or pay during this time. As a result, employees must use their existing statutory parental leave entitlement (such as maternity, adoption, shared parental or paternity leave) while their baby is in hospital. Due to the limitations associated with paternity leave, fathers and partners may exhaust their leave entitlement where their baby is in neonatal care for a prolonged period.

The new entitlements to statutory neonatal care leave (“SNCL”) and statutory neonatal care pay (“SNCP”) aim to address these issues. They follow several other Acts and Regulations that intend to strengthen family-friendly rights in the UK. For example, enhanced redundancy protections for pregnant women and new parents came into force on 6 April 2024, and amendments to the conditions associated with paternity leave were made effective from 8 March 2024. Employees will be entitled to SNCL under the NC(LP)A along with additional existing leave entitlements (maternity, paternity and shared parental leave). Employers, contractors and payroll service provider must be aware of this when calculating an employee’s leave entitlement. After April, it may be the case that the clock has not yet started on an employee’s parental leave duration, as the initial period of leave should be counted separately as SNCL.

After 6 April 2025, parents of babies who are up to 28 days old and admitted into neonatal care will be entitled to take SNCL and SNCP (subject to meeting the relevant eligibility criteria). The new rules stipulate that the baby must have been in neonatal care for a continuous period of 7 days or longer, which therefore excludes SNCL and SNCP for parents of babies who have a temporary and potentially less serious stay in the hospital. However, secondary regulations may specify exceptional circumstances in which neonatal care is regarded as continuous despite an interruption in the baby’s hospital stay.

Further, parents must be employees and have a parental or other personal relationship with the child who is receiving, or has received, neonatal care in order to take SNCL. Employees will be entitled to take SNCL for a minimum period of one week and a maximum period of 12 weeks. SNCL must be taken within the first 68 weeks of the baby’s life.

The definition of “employee” for the purposes of SNCP is “a person who is gainfully employed in Great Britain either under a contract of service or in an office (including an elective office) with earnings”. Like with SNCL, an employee must have a parental or other personal relationship with a child who is receiving, or has received, neonatal care in order to be eligible for SNCP. The child must receive 7 days of uninterrupted care however exceptions to this rule may be provided in secondary legislation. SNCP can be claimed in the first 68 weeks of the child’s life (the “qualifying period”).

Unlike SNCL which is a day-one right, an employee must fulfil the following criteria in order to be eligible for SNCP:

  • Have at least 26 weeks’ continuous service ending with the relevant week (the relevant week differs depending on the other statutory pay entitlements the employee may have).
  • At the end of the relevant week, be entitled to be in that employment.
  • Receive normal weekly earnings (the average weekly earnings which, in the relevant period, have been paid to the employee or paid for their benefit under the contract of service with the employer) for a period of 8 weeks ending with the relevant week of not less than the lower earnings limit (currently £123 a week) in force at the end of the relevant week.

In terms of the rate at which SNCP will be paid at, this will be determined by further regulations. The ‘NC(LP) Bill: Explanatory Notes’ suggests the rate will mirror that of statutory maternity pay i.e. the statutory rate or, if lower, 90% of the employee’s average weekly earnings.

The maximum of number of weeks SNCP will be payable and confirmation of when the employee must serve notice on the employer that they wish to claim it is also to be set out in further regulations.

Although the Act to effect SNCL and SNCP has been passed, we await further regulations to clarify the outstanding details regarding SNCP. We advise those in the freelance sector consider the following to prepare for the changes:

  • Examine and update company policies so that they meet the new entitlements.
  • Sharing information with employees about the upcoming entitlements and support them in understanding their new statutory rights.
  • Ensure payroll systems can accommodate and accurately process SNCP calculations. This will include the assessment of employees against the relevant eligibility criteria (i.e. continuity of service and minimum earnings thresholds).

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