In this article, Arbor Law’s Head of Employment, Fiona Morgan outlines changes to parental leave including statutory pay rate rises and neonatal care rights to assist employers seeking to comply with the incoming rules. She also briefly looks at the implications of the new Employment Rights Bill on family leave rights.
From April 6th, 2025, UK employment law will introduce significant new rights for parents whose babies require neonatal care – specialised medical care provided to newborn babies, such as those who are born prematurely, have low birth weight, or are experiencing health complications. These changes represent a major step forward for families facing the challenge of having a newborn in medical care, providing them with additional paid time off beyond existing statutory leave entitlements.
The new statutory neonatal care leave (SNCL) will be a day-one right, giving eligible employees up to 12 weeks of additional leave to support their family during this difficult time. The government estimates approximately 60,000 new parents annually will benefit from these provisions, which come after years of advocacy by charities supporting parents of premature and sick babies.
To qualify for this leave, employees must have a parental relationship with the baby receiving neonatal care. This includes biological parents, intended parents under surrogacy arrangements, adopters, or partners of the child’s mother or adopter who live together in an enduring family relationship. Eligible individuals must also have responsibility for the child’s upbringing and be taking the leave specifically to care for the child.
The definition of neonatal care under these regulations encompasses medical care received in hospital, ongoing medical care after hospital discharge that remains under consultant direction, or palliative and end-of-life care. Importantly, the neonatal care must begin within 28 days of birth and continue uninterrupted for at least seven days to trigger eligibility for this leave.
SNCL can be taken flexibly depending on timing. If taken while the baby is receiving neonatal care or within seven days after care ends (“tier 1 leave”), it can be taken in non-continuous blocks of at least one week with 15 days’ notice. Leave taken at any other time (“tier 2 leave”) must be taken as one continuous block with 28 days’ notice, though employers and employees can mutually agree to waive these notice requirements.
This leave must be taken within 68 weeks of the baby’s birth or placement for adoption. For parents of multiple births requiring neonatal care, leave accrues for each baby, though the 12-week maximum remains unchanged.
Eligible employees who have at least 26 weeks of continuous service and earn above the lower earnings limit (£125 from April 2025) will receive statutory pay during this leave. This will be paid at the prevailing statutory rate (£187.18 from April 2025) or 90% of normal weekly earnings, whichever is lower.
The integration with other types of leave is structured so that employees maintain their rights to other statutory leave as well as SNCL. If an employee has already started a period of other statutory leave such as maternity or paternity leave, neonatal care leave can commence after that period ends (so long as it is taken within 68 weeks. Conversely, if neonatal care leave has begun before other statutory leave starts, the neonatal leave pauses and remaining entitlement commences after the other leave concludes provided the employee is still within the Tier 1 period; if they are within the Tier 2 period, their remaining NCL entitlement must be added to any further period of NCL the employee is intending to take.
Employers should prepare by developing specific neonatal care leave policies that align with these new regulations while ensuring they don’t conflict with existing policies. They may also consider enhancing the statutory position by offering more generous pay, longer leave periods, or greater flexibility in how the leave can be taken.
Organisations must also be mindful that these provisions could lead to extended absences, particularly when combined with other statutory leave entitlements. For example, an employee might take 12 months of maternity leave followed by 12 weeks of neonatal care leave, potentially extending to 68 weeks of absence in some cases, even before accrued holiday is considered.
This new legislation, enacted through the Neonatal Care (Leave and Pay) Act 2023 and associated regulations, represents a significant enhancement to parental rights in the UK, recognising the unique challenges faced by families with babies requiring specialised medical care in their earliest days.
Also in April 2025, the UK will implement several increases to statutory payment rates. All statutory family-related payments – including maternity pay, maternity allowance, adoption pay, paternity pay, shared parental pay, and parental bereavement pay – will rise from £184.03 to £187.18 weekly. Additionally, the lower earnings limit will increase slightly from £123 to £125.
The national minimum wage will also see notable increases effective April 1, 2025. Workers aged 21 and over will be entitled to £12.21 per hour, up from the previous rate of £11.44. Those between 18 and 20 years old will see their minimum hourly rate rise to £10.00, a significant increase from £8.60. For younger workers aged 16-17 and apprentices, the minimum wage will increase to £7.55 per hour, up from £6.40.
Statutory sick pay will also receive a modest increase, rising from £116.75 to £118.75 per week beginning in April 2025.
The reforms within the Employment Rights Bill are unlikely to come into force until 2026, but consultations on the Bill’s contents will take place in 2025. At present, the Bill proposes significant changes to entitlements to family leave rights. Specifically, the legislation aims to remove the qualifying period of employment requirement for both paternity leave and ordinary parental leave.
Ordinary parental leave in the UK allows eligible employees to take up to 18 weeks of unpaid leave per child (calculated up to their 18th birthday) to care for them, with a maximum of four weeks permitted per year per child.
Under the current system, employees must have worked for a company for more than a year to be eligible for these types of leave. The proposed changes in the Bill would transform these into day-one rights, meaning employees would be entitled to paternity leave and ordinary parental leave immediately upon starting employment, without any service requirement.
For advice and support on implementing new neonatal care leave policies into your business processes you can contact me to discuss how we can assist further.
Fiona is a senior employment lawyer with more than 18 years’ experience in advising a diverse range of corporate clients on employment law issues. Before joining Arbor Law, she was a partner and co-head of the Employment law department at Kennedys, working with a wide range of clients from multinational insurers and transport businesses to SMEs and start- ups. She advises clients on an array of employment matters, from day-to-day employment law queries to strategic guidance on long-term projects and corporate transactions.