The Neonatal Care (Leave and Pay) Act: What businesses need to know
For businesses operating in the UK, staying ahead of employment law changes is essential. From 6 April 2025, the Neonatal Care (Leave and Pay) Act introduces critical new rights for employees, designed to give parents the opportunity to be with their baby during medical treatment, without it affecting their maternity, paternity, or shared parental leave.
The Neonatal Care (Leave and Pay) Act 2023 Act (the Act) grants eligible employees additional statutory leave and pay when their baby requires neonatal care. Taking effect on 6 April 2025, it aims to ease financial and emotional strain by allowing extra time off without income loss.
This new legislation introduces obligations for all UK employers, making it essential for business owners and HR teams to prepare. In this blog, we’ll break down the key changes and requirements for UK businesses, along with practical steps to get ready.
Who does the Act apply to?
The Act applies to all UK employers and provides rights for employees who:
Have a baby requiring neonatal care for at least 7 continuous days before they reach 28 days old.
Have a qualifying relationship with the baby (such as being a parent or primary carer).
Meet the eligibility criteria for neonatal care pay (which aligns with existing statutory maternity and paternity pay requirements).
Please note: The new right applies only to babies born on or after 6 April 2025.
Key changes and requirements for businesses
The Neonatal Care (Leave and Pay) Act introduces several new obligations that businesses must adhere to, such as:
Statutory neonatal leave: Eligible employees will be entitled to up to 12 weeks of neonatal leave in addition to their existing maternity, paternity, or adoption leave. As many people will already be on some form of family leave while their baby is in neonatal care, neonatal leave will often be taken after neonatal care has ended and at the end of maternity/shared parental or adoption leave.
Statutory neonatal pay: Employees who meet the eligibility criteria of at least 26 weeks of service and average weekly earnings of at least £125, will be entitled to Statutory Neonatal Care Pay (SNCP) during their leave. From 6 April 2025, SNCP will be paid at the prescribed statutory rate of £187.18 or 90% of the employee’s average weekly earnings, whichever is lower. SNCP may be paid for up to 12 weeks and must be claimed within 68 weeks of the child’s birth.
Record-keeping requirements: Employers will need to keep accurate records of neonatal leave and pay claims to ensure compliance with the Act.
Notification process: Employers may require employees to provide notice and evidence (such as hospital admission records) to claim neonatal leave and pay.
The Government also plans to enhance protection against dismissal for employees returning from certain types of family leave, including neonatal care leave. This change is part of the Employment Rights Bill, which is currently progressing through Parliament.
Practical steps for businesses to prepare
To ensure your business complies with the Neonatal Care (Leave and Pay) Act, consider taking the following steps:
Review existing leave policies: Update your company’s leave policies to include neonatal leave entitlements and statutory pay provisions.
Train HR and payroll teams: Ensure your HR and payroll teams are familiar with the new rules and prepared to process neonatal leave requests and payments.
Implement clear communication strategies: Inform employees about their new rights and provide easy-to-access guidance on how to apply for neonatal leave. If neonatal leave is requested by an employee, support the employee by communicating in their preferred mode and frequency.
Update employment contracts and handbooks: Make necessary revisions to employment contracts and staff handbooks to reflect the new statutory entitlements.
Conclusion
The Neonatal Care (Leave and Pay) Act marks a significant step forward in supporting working parents of babies in neonatal care. By understanding the requirements and taking proactive steps to ensure compliance, businesses can create a supportive work environment while meeting their legal obligations.
As the Act comes into force, it’s crucial for businesses to stay informed, update policies, and engage with employees to facilitate a smooth transition. Providing clarity and support for affected employees not only ensures compliance but also promotes a more compassionate workplace culture.
The relevant templates in our Employment and HR category of templates will be updated to reflect the Act from 6 April 2025.
Ashleigh Evans