Neonatal care leave – What is it and what does it mean?

From 6 April 2025, eligible employees will gain a statutory right to neonatal care leave and pay.

This long-awaited reform, introduced under the Neonatal Care (Leave and Pay) Act 2023, aims to support parents during an intensely challenging period.

Here’s what you need to know about neonatal care leave and what it means for employers.

The new entitlement at a glance

The new legislation will allow eligible employees to take up to 12 weeks of leave and statutory pay if their baby requires neonatal care. This is in addition to existing maternity, paternity, or shared parental leave.

The entitlement applies to parents of babies:

· Admitted into neonatal care within 28 days of birth.

· Remaining in hospital for a continuous period of seven full days or longer.

This leave will be a day-one right, meaning employees can access it from the start of their employment.

The new entitlement will be available across England, Wales, Scotland, and Northern Ireland.

Eligibility for statutory neonatal pay

While neonatal care leave will be a day one right, statutory neonatal care pay will only be available to employees who meet the following criteria:

· Continuity of service: Employees must have worked for their employer for a set minimum period.

· Earnings threshold: Employees must earn at least £125 per week to qualify.

Statutory neonatal pay will be £187.18 per week or 90 per cent of the employee’s normal weekly earnings (whichever is lower) for 2025/26.

What does this mean for your business?

The introduction of neonatal care leave and pay has significant implications for employers.

With around 60,000 parents expected to benefit annually, you must prepare your payroll systems to handle statutory neonatal pay.

This includes implementing the correct pay rates and ensuring compliance with continuity of service and earnings threshold requirements.

You should also consider:

· Updating HR policies: Review and update your leave and pay policies to include neonatal care leave and pay entitlements. Make sure these updates are clearly communicated to all employees.

· Flexible workforce planning: With up to 12 additional weeks of leave now available to some employees, it is essential to plan for potential staffing gaps. Develop strategies to ensure business continuity, such as flexible working arrangements or temporary cover.

· Support for employees: Parents with babies in neonatal care are likely to experience significant stress. Providing clear information about their entitlements and offering additional support, such as counselling services or flexible working arrangements, can make a meaningful difference.

· Training HR teams and managers: Ensure relevant staff members are equipped to handle neonatal leave requests with sensitivity and consistency, avoiding missteps during emotionally charged situations.

Beyond the clear moral reasons for implementing neonatal care leave and statutory pay, the implementation of neonatal care leave should benefit your business:

· Consistency in workforce planning: The statutory framework offers clarity for managing neonatal leave, reducing reliance on informal arrangements such as unpaid leave or annual leave requests.

· Boosting staff retention: Demonstrating support during difficult times can promote loyalty, helping retain employees who value employers with compassionate policies.

This reform sits alongside other updates to family-friendly rights, such as upcoming changes to flexible working and carer’s leave.

Staying informed and proactive will help employers adapt smoothly and position themselves as supportive workplaces. For further guidance on neonatal care leave, get in touch with our payroll team.