Changes in paid leave for new parents from 1 April 2015

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parental-leaveNew rights allowing UK parents to share leave following the birth or adoption of their child have come into effect from 1st April 2015.

This will effect both parents and employers, and it is important that both understand the potential benefits and obligations they have to keeping within the regulations.

Beyond the biological mother and father, parents include the following :

–       those who are adopting,

–       same-sex couples,

–       co-habiting couples,

–       a couple bringing up a child together even if the baby is from a previous relationship.

The new rights give up to 50 weeks of leave – 37 weeks of which is paid (at a rate explained below) – which can be shared by parents if they meet certain eligibility criteria.

Historically it has only been an option for a mother to take extended paid time off work to look after a new born, but the new rights now allow for fathers to have extended leave too. The parents now have the flexibility to take leave in their child’s first year as best suits them, which may include:

–       having time off work at different times – good for shared childcare

–       doubling up by taking leave at the same time

–       in up to three blocks of leave during child’s first year.

It is therefore it is vital for employers to understand the new rules.

Does this change maternity and paternity leave?

Initially the answer is “not greatly”, as fathers will still be entitled to two weeks of paid paternity leave. The new rules however replace “additional paternity leave” rules which in reality has been very infrequently used.

Mothers can still take maternity leave under the existing rules, which stipulate that they must take the initial two weeks after birth off work.

The change mean that the maternity leave can be cut short and the balance of leave exchanged for shared parental leave. Both parents will then have a flexible choice of how to split up the rest of the leave entitlement – of up to 50 weeks.

For example, if a mother ends her maternity leave after the 22 weeks following the child’s birth, there is a balance remaining of up to 30 weeks of leave. The mother can choose to take 20 weeks and her partner the other 10 weeks. Alternatively, the couple may choose to take 15 weeks each of leave at the same time or at different times, or any combination of up to 30 weeks.

Can parents take this leave when they want?

The new flexibility means that shared parental leave does not have to be taken all in one go.

A parent can book up to three blocks of leave in the course of the child’s first year.

They must give their employer notice of at least eight weeks before taking leave.

Employers may agree to more blocks of leave (minimum of a week) but that is up to them.

Parental leave means that a mother who wants this additional flexibility (compared to maternity leave) can take her leave as shared parental leave – even if the father takes none of it – rather than traditional maternity leave. This could be beneficial in aiding the mother balance home and business life.

Are all parents eligible?

This is where it gets (a little) more complicated, as there are employment criteria which both parents need to meet:

–       To take shared leave, one parent must have been an employee with at least 26 weeks of service with the same employer by the end of the 15th week before the baby is due, or when matched with an adopted child.

–       The other must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned at least £30 a week in 13 of the 66 weeks.

Furthermore, there are caveats. For example, the self-employed, and a parent not in work at the time of the birth can still qualify. Therefore, each case needs to be looked at and assessed on its own situation.

How much will parents be paid?

Shared parental leave pay is the lower of:

–       £139.58 a week or

–       90% of an employee’s average weekly earnings.

The employer may offer more, but there is no obligation to do so.

This is the same as statutory maternity pay, except that during the first six weeks statutory maternity pay amounts to 90% of whatever the employee earns, with no maximum. Therefore, Mothers may be personally better taking Maternity initially as they could be better off during the first six weeks on maternity.

Additionally, shared parental pay is only given for 37 weeks. The remaining 13 weeks of leave entitlement, if taken, is unpaid.

Are there any potential issues for employers?

Some mothers contractually receive full pay during their maternity leave, rather than the statutory minimum. In response some lawyers have suggested that some employers are concerned that dads, taking shared parental leave, could bring discrimination claims if the extra pay was not offered to them too. As a result, lawyers say some employers may stop giving mums this enhanced pay.

This is a good opportunity to update your employment contracts regarding parental rights, extending to areas such as leave to look after sick children as well as maternity, paternity and share parental leave.