Kavitha Sivasubramaniam examines how employers can prepare for the new neonatal leave and pay entitlements that will come into effect on April 20, 2025.
In April 2023, the Neonatal Care Act (Leave and Pay), which was first proposed in Parliament nearly three years ago, will finally come into effect.
This policy is intended to help employees who are in a parental or personal relationship with an infant that needs neonatal care. Employees will be able to take up to 12 paid weeks. The policy will also apply to paternity leave, shared parental leave and maternity leave.
Catriona Ogilvy of The Smallest Things charity, the founder of the campaign to secure neonatal leave, welcomed the new legislation. “This new law will be so important for families. It gives them the financial and emotional support they need in a period of stress and trauma.”
She says that parents should not be worrying about their work or pay while their child is in hospital. Many parents return to work, and some mothers use up their maternity leaves while their infant is in neonatal units.
Ogilvy explains that “this impacts on both the health and well-being of parents and their babies, and reduces chances for a successful return back to work.”
The Smallest Things conducted a study that found 11% of parents were unable to return to work due to their medical needs, and 16% because their child’s needs continued to be met. The Act’s extra time will help parents who have experienced the trauma of neonatal care and are still dealing with the effects of premature birth to return to the workplace.
Simon Kelleher is the head of policy at Working Families. He worked on the bill with Stuart McDonald MP when it went through Parliament.
He said: “At this moment, it is a lot of a gamble for employees to see if they are entitled to paid leave or leave without pay based on the offer from their employer. But it’s important to support people when any problems arise.
The provision of statutory wages is a great idea for small employers who may find it difficult to offer paid leave. “It’s generally pretty generous.”
Working Families is pleased that it has helped to expand eligibility criteria to reach more women who earn less.
Eligibility and entitlement
According to the Act, time off is taken in full-week increments, as with all other parental leave laws, starting from the moment the baby was in neonatal care continuously for seven days, up to 12 weeks.
The entitlement is available to: parents who have met the requirements for notice, and have remained in the neonatal unit within 28 days of birth, and for seven consecutive days.
For parents to be eligible for this program, they must be employees, be responsible for the care of the neonatal child, and give the correct notice to the employer. They also need a child that meets the requirements for neonatal health care.
Karen Lough is the director of human resources at HR software company Ciphr. She believes that the leave will be very valuable for many employees and reduce their financial burden, but some may still not receive the support they require.
She said: “This legislation will help level the playing field.” The period covered by the law is short, but those earning below the limit may not be eligible.
Lough acknowledged that, as with many other employment rights and benefits, the provisions do not apply to self-employed people.
She points out the impact on financial and operational aspects of organisations.
“HR and employers should start thinking of other ways to help. Lough explains that there are many resources available.
Legal Considerations
Elaine Huttley is the national head of employment at Irwin Mitchell. She stressed that although the Neonatal Care Act (Leave and Pay) 2023 was passed into law in May 2023, more regulations were needed to fully understand how the Act will work in reality.
She explains that “we will need an understanding of any notices employees need to give about their intent to take leave, as well as the evidence they need to provide.”
“Employers must act now before the new rights take effect. They will need to update employee contracts to reflect the fact that it is a paid right and create a new policy explaining how the right operates. It is still too early to make any firm decisions. “Once we receive the regulations and more information, employers will be able to start preparing for the new obligation.”
After the law is passed, all employers will have to comply with it and employees won’t be subjected any harm because they sought or took a neonatal leave. Employees will be protected from unfair dismissal if their dismissal is related to the fact that they have taken or attempted to take a neonatal leave.
Huttley states: “A dismissal such as this will fall under the category of ‘automatically unjustified dismissal.’ All organisations should be aware of the new right, and stay up-to-date with any changes in this area.
Kate Palmer, Employment Services at Peninsula, agrees, and highlights that several case law examples dating back to 2024 show the negative outcomes that can occur when employers make this mistake.
She said: “As this is a new form of statutory leave with pay, employees who take this leave are protected against dismissal or other detriment for taking or attempting to take this leave.”
Lough says that from a software perspective it could be a “bit of a minefield”.
She advises, “Familiarise yourselves with it, including eligibility criteria and any nuances.” Consider updating your HR platform if necessary.
Extra support
Employers should also be aware of the costs that are associated with prolonged hospital stays. Ogilvy says that even though the neonatal pay and leave is capped at twelve weeks, and is paid at a standard rate, many families are still forced to return too early.
She explains: “The leave doesn’t take into consideration the developmental needs of an infant born prematurely or the ongoing medical interventions, readmissions to the hospital and appointments that happen after returning home from neonatal treatment.” It also doesn’t give parents enough time to recuperate at home and bond with their child.
Ogilvy is of the opinion that employers should support their staff in returning to work after a neonatal hospital stay. They can do this by understanding that premature or sick babies can have ongoing medical requirements and are often re-admitted. This may mean that they need regular hospital appointments or checks-ups. They should consider formal and informal requests for flexible working patterns, additional paid or unpaid leaves and other forms of leave.
Kelleher says that in addition to flexible work arrangements, like allowing for more home-based or hybrid working and flexing hours, offering paid parental leave, or care days, would be beneficial. It can also be helpful to inform employees about their rights and entitlements.
He adds: “A little bit of understanding by managers can go a long way.” It’s important to give people space, but also let them know that you are there for them when they are ready. This doesn’t have to cost anything.
While the Act is generally welcomed, many feel it does not go far enough.
Ogilvy: “We encourage employers to not wait, but to make changes now. We ask them to support staff who have experienced a neonatal hospital stay beyond the new legal requirements.”
Huttley says that there are eligibility criteria for employees to take neonatal leave and that the maximum time limit is based on their circumstances.
She adds: “Employers may choose to implement a contractual rights before April 2025 and/or provide more generous leave or pay. They must, however, ensure that they adhere to the statutory rights, once they are in place.”
Reach, a publishing group, has decided to introduce an enhanced neonatal care policy in 2022. This will provide 12 extra weeks of paid leave for parents whose baby is born early and requires neonatal care.
Julia Warren, group HR director at the company, said that they were very pleased with this and would continue to make it known to our employees.
She explains, “This is important to us because we want to encourage all new parents to be active in the crucial first weeks and months of a child’s life. This can be a challenging and exciting time for many families.”
Early Action
Ogilvy insists that employers do not need to wait for the introduction of new entitlements. They can start making a difference right now.
The Smallest Things Employer With Heart Charter encourages employers to act now to improve the situation and to go beyond the new legal requirements. This includes extending full-pay leave to parents and partners of premature babies by the number days that their baby was born.
She continues: “We urge employers to act now and go beyond the new legal requirements to support staff who have experienced a neonatal hospital stay.”
Kelleher believes that offering support to employees not only reduces stress, but it also benefits employers.
The new provisions are a huge relief to parents. Employers must also consider the long-term effects and feelings of resentment if employees don’t feel treated with empathy during a stressful period, leading to disengagement.
Palmer continues: “By giving parents who have very sick babies the right to take leave for their care, the law goes a long way to support these employees. Employers can offer their own assistance, such as employee assistance programs, to employees, even if the law does not require it. Before the law is passed, employers can offer their own form of neonatal leave and then enhance those rights once it becomes law.
Warren thinks that employers and their employees will benefit from enhanced benefits.
She says: “We have found that employees who feel supported through major life events are more likely than not to return to their jobs more motivated and focused, and to stay with the company. We would encourage employers to offer enhanced neonatal leaves, as this is good for families and fosters a more inclusive work culture.
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