Neonatal leave and pay to be introduced from April 2025

The Government has now confirmed that the Neonatal Care (Leave and Pay) Act 2023 (the ‘Act’) will come into force on 6 April 2025. Currently, many families have to return to work while their babies are sick in hospital or use their annual leave entitlement or other types of parental leave. However, the Act will entitle eligible parents to up to 12 weeks of neonatal care leave from April 2025, in addition to other family leave.

Neonatal leave will be a day one right, meaning employees will have  immediate access to leave from the first day of their employment. However, to be eligible for neonatal pay, employees will be required to have worked for their employer for a continuous period of 26 weeks (known as the “qualifying period”) and earn at least £123 a week on average. The leave must be taken within 68 weeks of the baby’s birth. The amount of neonatal pay is expected to be the lower of the statutory prescribed rate or 90% of the employee’s average weekly earnings. The Government has laid regulations before Parliament for approval that will set out the detailed provisions relating to the right to neonatal leave and pay, including the process for requesting such leave and the evidence parents must provide to their employer.

The Act will apply to parents whose babies are admitted to neonatal or palliative care within the first 28 days of the baby’s life. The baby must be born on or after 6 April 2025 and must receive neonatal care for at least 7 consecutive days. For each 7-day period that the baby receives uninterrupted neonatal care, the eligible parent will be entitled to one week of statutory neonatal care pay. Eligible parents include the baby’s biological parents, the partner of the mother, or an intended parent of the child, including those in adoption and surrogacy situations. Employees taking neonatal leave will be subject to the same protections as those who take maternity or paternity leave, such as protection from detriment or dismissal as a result of taking neonatal leave.

Reports conducted by the charity Bliss, which campaigns for premature and sick babies, revealed that in 2018, 35% of families were signed off sick when their babies were admitted to neonatal care for more than 2 weeks. Additionally, in 7 in 10 families, at least one parent of a baby who has encountered a neonatal stay of over 4 weeks will return to work while their baby is still in the hospital.

So how can employers prepare for the implementation of the Act?

The Department for Business and Trade (DBT) is expected to issue guidance for employers in light of the Neonatal Care (Leave and Pay) Act 2023 and Bliss has also issued helpful guidance for employers and employees. We suggest that to prepare for the implementation of the Act, employers should:

• Review staff handbooks and update them accordingly to reflect the provisions of the new Act
• Make sure HR staff are trained and up to date with the rules of the Act (for example, which staff members are eligible for pay and how much pay they are entitled to).
• Adjusting payroll systems to ensure they can accommodate the new Statutory Neonatal Care Pay calculations.
• Consult a solicitor if you are unsure about how the Act will affect your business and employees.

If you require any assistance with any of the issues mentioned in this article, do not hesitate to contact the Employment team at Thomson Snell & Passmore.