Neonatal Care Leave set to become a day-one right – information for employers

The UK Government confirmed in a press release at the end of January that, subject to the passing of Regulations, Neonatal Care Leave will become a ‘day-one’ right on 6th April 2025. This change follows the passing of the Neonatal Care (Leave and Pay) Act 2023. Although this Act was passed by the previous Government, the Regulations required to implement the changes have been laid before Parliament by the incumbent Labour Government as part of its ‘Plan for Change’ and focus on ‘supporting working families’.

Leave

These measures will be applicable to parents, intended parents, or the partner of the mother of babies who are born after 6th April 2025; are admitted to neonatal care within 28 days of birth; and who have a continuous stay in hospital of more than seven days. The right will allow parents to take up to 12 weeks’ leave (and in some circumstances, pay) on top of any other leave they may be entitled to – including maternity and paternity leave. If adopting, similar principles apply.

The leave will be calculated at one week for every week the child spends in neonatal care without interruption. The Act applies to each parent separately meaning both are entitled to up to the full 12 weeks, but only in respect of one birth (e.g. if twins are in neonatal care for 12 weeks, a parent can take 12 weeks in respect of both children, not 12 weeks for each child).

The leave is split into two tiers: the ‘tier one period’ refers to the time while the child is receiving neonatal care in hospital (and for up to a week afterwards). The ‘tier two period’ refers to any other time in which the employee is entitled to take the leave. Leave taken during the ‘tier one period’ does not need to be taken consecutively but must be taken as blocks of at least one week. Leave taken during the ‘tier two period’ must be taken consecutively. The entirety of the leave must be taken within 68 weeks of the child being born but can start at any time. This will allow parents to commence Neonatal Care Leave following the completion of any maternity/paternity leave.

Employees will be required to give their employer notice of any intention to take Neonatal Care Leave. If the leave is taken during the ‘tier one period’, notice must be given before the employee is due to start work on their first day of absence or as soon as reasonably practicable. During the ‘tier two period’, if leave should last less than one week the employee should give 15 days’ notice and if more than two weeks of leave are taken, then 28 days’ notice should be given.

Pay

The qualifications for entitlement to Neonatal Care Pay (NCP) are the same as the leave, but with the additional requirements of being continuously employed for a 26-week period and earning more than the Lower Earnings Limit (£125 a week as of 6th April 2025). NCP is expected to be at the statutory prescribed rate (£187.18 per week as of 6th April 2025) or 90% of the employees’ weekly earnings, whichever is lower.

The Act is estimated to benefit around 60,000 people in the UK. It has been welcomed by campaigners such as Bliss, a charity for babies who are born premature or sick. A recent study by the charity found that the average increase in costs for a family with a baby in hospital was £405. They hope that this statutory allowance can help to reduce the economic stress on parents during an already very stressful time.

What should employers be thinking about?

Now a firm implementation date has been set, employers should begin to consider the impact this Act will have. Around one in seven babies born in the UK require neonatal care after birth with the average stay lasting seven days. This makes it unlikely that employers will have a member of staff requiring the full 12 weeks’ leave that is available. However, employers should begin to take practical steps to prepare. Staff contracts may need to be revised to represent the new entitlement and policies regarding family leave will need to be updated.

It will be the company’s responsibility to pay initially for the Neonatal Care Pay. However, employers will be able to claim this payment back from the Government by reducing their NICs. Payroll and HR departments will need to be prepared to implement these arrangements.

Whilst on leave, an employee’s terms and conditions of employment (other than to pay) are deemed to stay the same. Employers should also consider the support they have in place for staff who return to work following a neonatal stay. There should be an understanding that many babies who require neonatal care will have ongoing hospital appointments in their early years of life. Allowing staff to work flexibly to allow them to attend these appointments can help aid in a smooth return and reduce the potential for staff taking sick leave due to stress.

Employees who qualify for Neonatal Care Leave will be afforded the same employment rights and protections as parents taking other family-friendly leave to the extent that these are not already protected by virtue of them taking that leave e.g. the right to return to the same job after leave, the right not to be subject to detriment by virtue of taking leave, and enhanced protection from redundancy.

These Regulations are complex, as are the individual circumstances in which they might apply. If you require any information or assistance with regards to the Neonatal Care (Leave and Pay) Act 2023 or any of the other proposed changes in 2025, please contact out specialist Employment team.