New neonatal leave and pay: a practical guide to the changes for employers 

According to the neonatal charity, Bliss, around 90,000 babies are admitted to neonatal units every year in the UK, either because they have been born prematurely, or they were born full-term but unwell.  On average, babies spend eight days in neonatal units, but babies born at less than 27 weeks spend an average of 93 days in hospital.  This can lead to additional financial pressures on new parents, as well as a higher likelihood of post-natal depression. Babies born prematurely are also more likely to have long-term medical needs.

From 6 April 2025, employees with babies in neonatal care will be entitled to statutory neonatal care leave (SNCL) from the first day of employment. This is a significant change in the law, as, currently, parents would need to use their existing statutory leave entitlement whilst their baby is in hospital. That entitlement may then be exhausted before the baby comes home.  

This leave comes on top of existing rights such as maternity, paternity, or shared parental leave, meaning if an employee is already taking another type of statutory leave, they can add the relevant period of SNCL to the end of that leave. Employers need to be aware of this when calculating leave entitlements, as it may be that another type of parental leave will not have begun until the SNCL has ended. 

Employed parents of babies up to 28 days old who are admitted to neonatal care for at least seven days (uninterrupted), will be entitled to take SNCL of between one and 12 weeks, and, if they meet eligibility requirements (including having 26 weeks’ service prior to the start of the SNCL), will be paid for that leave at a rate in line with statutory maternity pay. SNCL can be claimed in the first 68 weeks of the baby’s life.

Like other forms of parental leave, employees will be entitled to return to their original job or to a suitable alternative, depending on the duration and structure of the leave periods taken.

The introduction of neonatal leave and pay is a significant development in support for working parents, but it also brings additional responsibilities and challenges for employers. We recommend that employers start to consider how to prepare for this change in advance of April. Preparations will likely include:

• Establishing a clear process for employees to apply for neonatal leave.
• Reviewing and updating handbook policies and contracts to reflect the new entitlements.  
• Ensuring employment contracts explicitly refer to the right to neonatal leave and pay, providing clarity for both employees and those managing the process.
• Making adjustments to payroll and HR record systems to process neonatal leave and pay entitlements accurately. Employers should liaise with their payroll providers to implement these changes and prepare for potential increases in administrative workload related to leave and pay requests.  

• Providing line managers and HR teams with training to understand the new entitlements enabling them to handle requests knowledgeably and with sensitivity. Employers should ensure their managers and HR teams understand that this can be a particularly traumatic time for new parents and that they should be supported as much as possible. Employers are also advised to consider how this may impact employees once they return to work, for example, the impact on parents who may now be caring for a child with a long-term health condition. This may need to be taken into account when managing performance or absence issues with affected employees.
• Considering how the employer will fund any additional paid leave, as well as how they will fund any temporary staffing needs to cover the absent employee’s workload. This may also involve establishing connections with staffing agencies proactively, or considering whether any internal system can be put in place to ensure cover can be arranged promptly and cost-effectively. 

Employers will need to communicate these changes to their employees and can do this in a number of ways, for example, in newsletters, emails, intranet updates, or team meetings. This should include advising employees of the process and forms required to apply for neonatal leave.

If an employer fails to comply with the legislation, employees may be entitled to bring a number of different claims in the employment tribunal, for example, automatic unfair dismissal, protection from detriment, discrimination or pay claims. 

Some business leaders are concerned about how employers will afford this new statutory entitlement amidst other rising costs. However, we believe proactive employers will benefit from increased morale, retention, and productivity. Employees who feel they are working with a supportive employer are more likely to return to work, but are also less likely to be negatively impacted by the stress of trying to juggle their caring and work responsibilities.

If you have any questions about implementing these changes, consulting with an employment law specialist is strongly advised. 

Introducing neonatal leave and pay may pose initial challenges in resource planning and administration for employers, but it also offers clear benefits for employers who embrace the change. By supporting employees during difficult times, employers can build loyalty, boost productivity and morale, and reduce long-term absenteeism. With proper preparation, businesses can turn this new requirement into an opportunity to strengthen their relationships with their employees, leading to higher return and retention rates, lower costs relating to internal HR management processes, as well as less frequent and lower recruitment costs.