The reshaping of family-friendly leave is here! We have only eight weeks to go before Shared Parental Leave (SPL) will fully join the suite of family friendly leave to sit along-side maternity, paternity, adoption and parental leave, for births/placements for adoption expected on or after 5 April. Are you ready?
Although SPL came into force on 1 December last year its immediate effects were limited, as SPL only applies to parents of children due to be born/adopted on or after 5 April. This date is fast approaching but don't panic. There is still time to get ready.
What employers need to be doing now
Employers should be:
- preparing policies, forms and guidance on SPL
- deciding whether to offer enhanced SPL pay and if so on what basis
- reviewing existing family leave policies to incorporate changes due in 2015 and references to shared parental leave
- planning how to communicate this new right to employees
- training line managers on SPL including how it will operate and how to respond to requests.
Below is a summary of the new regime for those unfamiliar with its complexities and the extent of the changes.
What do employers need to know?
Overview
To re-cap, the new regulations encourage the sharing of "family" leave between working parents. Employees can opt into the new system of shared parental leave for children due to be born/placed for adoption on or after 5 April 2015. Given that the new system relates to an expected due date and taking into account the age old dilemma of pinpointing precisely when a baby will make its entrance into the world, there is a real possibility of parents being able to opt into this system ahead of April.
In very broad terms, mothers and adopters can choose to curtail maternity and adoption leave to opt in to shared parental leave. The little-used right to additional paternity leave will be abolished on 5 April 2015. Shared parental leave doesn't replace existing maternity and adoption leave rights. Instead it enables mothers/adopters to elect to convert a portion of that leave, so that up to 50 weeks' leave and 37 weeks' pay can be shared between both parents.
The timing for taking of the leave will also be more flexible. Parents can apply for continuous or discontinuous periods of leave which they can take at the same time or separately up to the child's first birthday/anniversary of placement.
When a period of continuous leave is requested it cannot be refused. Discontinuous periods of leave are possible, but only where agreement is reached with the employer.
The requirements in a nutshell
Getting to grips with the new right isn't exactly easy. Akin to the most complicated flat pack baby furniture instructions, employers need to understand how to fit together:
- eligibility requirements for leave × 2*
- eligibility requirements for pay × 2
- entitlement notices for leave × 2*
- entitlement notices for pay × 2*
- curtailment notices
- booking notices × 2
*mother/primary adopter & father/partner
Broadly, working parents who share the main responsibility for caring for their child are eligible.
The conditions for taking Shared Parental Leave (SPL):
- they must be an employee who has been working with the same employer for not less than 26 weeks ending with the "relevant week", which is the 15th week before the Expected Week of Childbirth (EWC) and remain in continuous employment with that employer until the week before they start any period of Statutory Shared Parental Pay (SSPP).
- they must share or expect to share the main responsibility for the care of the child with their partner.
- the mother must be entitled to statutory maternity leave (SML) and have ended that entitlement, by returning to work or by having given a curtailment notice.If the mother is not entitled to SML but is entitled to SMP/maternity allowance, her partner can claim SPL provided she ends that entitlement.
- the spouse/partner must satisfy the 'employment and earnings test'.
- the employee must give notice of entitlement to their employer.
- if requested, the employee must give the employer the details of the other parent's employer and a copy of the birth certificate.
- the employee must give a 'booking notice' at least eight weeks before the start date of SPL requested specifying start and end dates for each period of SPL requested.
The conditions for receiving Statutory Shared Parental Pay (SSPP):
In addition to the SPL requirement:
- the employee's normal weekly earnings for the eight weeks ending with the "relevant week", must be at least the lower earnings limit for paying Class 1 National Insurance contributions.
- during the payment period, they must intend to care for the child, be absent from work (other than SPLIT days (shared parental leave in touch days)).
- the employee must give notice at least eight weeks before they wish the payment period to start.
Wide scope of potentially eligible couples
The above eligibility criteria are potentially wider than it may first appear. The person claiming SPL/SSPP must be an employee in a relationship where both parents are working. However, both parents 'working' does not necessarily mean both parents are 'employees'. Eligibility is not limited to where both parents are employees. For example, an employed father may, in some circumstances, qualify for SPL where the mother is self-employed and in receipt of maternity allowance.
Prescriptive notices
The notification requirements governing the content and timing for the various notices are prescriptive. For example, the curtailment notice must state the date on which the mother's SML is to end. This must be at least eight weeks after the date the notice is given and at least one day after the end of the compulsory maternity leave period.
As regards the entitlement and booking notices, the initial requirement is for the employee to submit a non-binding notice that he or she intends to take shared parental leave. This is then followed by a booking notice confirming full details of the request, including the amount of and pattern of proposed leave. The booking notice may be given at the same time as or after the entitlement notice, but cannot validly be given before. Add to the mix the rules as to variation or revocation of the notices and it's clear employees are likely to need guidance on the system and how to make a request.
Flexibility
The potential flexibility in the pattern the leave may be taken is vast. Parents can apply to be on leave at the same time or separately up to the child's first birthday/anniversary of placement. Provided the mother has validly curtailed her maternity leave for a future date, the mother could potentially still be on maternity leave while the father is simultaneously on shared parental leave.
When a period of continuous leave is requested it cannot be refused. Discontinuous periods of leave are possible, but only where agreement is reached with the employer. The number of booking/variation notices is limited to three, subject to certain exceptions. For instance, a variation notice as a result of the child being born sooner or later than the expected week of childbirth will not count towards the limit.
For couples seeking very flexible arrangements there is good news and bad news. The ability for the employee and employer to agree discontinuous periods of leave together with up to 20 SPLIT days opens the possibility for some very creative leave patterns to be agreed.
On the other hand, reaching employee and employer agreement x 2 for discontinuous periods of leave may prove difficult. While one parent's employer may agree to be flexible the other parent's employer may not. The parent who has agreed a flexible leave pattern may have to go back and vary the agreement where their partner's employer is unable to agree to the pattern sought.
Employers need to understand the booking and variation notice requirements as whether an arrangement will work will in many cases involve the mother and her employer's agreement dovetailing with the father and his employer's agreement.
One thing is clear, the 50-week period within which SPL can be taken cannot be extended. Any SPL that is not taken within that period will be lost.
Pay
The default position in relation to SSPP is that it is paid at the flat statutory rate - currently £138.18 and rising to £139.58 per week from 5 April. But what is the position for employers who offer enhanced contractual maternity pay?
The Government's view is that there is no legal requirement for employers to offer corresponding enhancements to shared parental pay. Employers are free to offer more generous enhanced arrangements if they wish, but not obliged. Whether an employer who fails to match maternity pay enhancements will face a successful discrimination claim is yet to be seen. It is likely to turn on the particular circumstances of the employer and the reasons for adopting the policy in question.
Women who are entitled to enhanced contractual maternity pay need to be clear about their contractual position. A woman could find herself financially worse off when converting from maternity leave attracting contractual pay to statutory shared parental leave and pay. What is clear, is that an employer cannot offer enhanced contractual shared parental pay to mothers only.If an employer chooses to offer enhanced contractual shared parental pay it must offer it to both mothers and fathers.
Potential take up
A survey published in January by the Department for Business, Innovation and Skills (BIS) suggests take up may be higher than for the soon to be repealed additional paternity leave. Of the 2,100 people surveyed, 53% of respondents thought that childcare should be shared equally between parents with a higher percentage of men than women (56% compared with 50%) taking this view. Of those considering parenthood in the future, 83% said they would consider taking SPL.
Will SPL take up rates prove higher than under the outgoing additional paternity leave system? The potential flexibility of when the leave may be taken, including concurrently, may make the leave an attractive choice for many. The key will no doubt be financial viability for the family. As more employers offer enhanced contractual pay to those taking SPL, mirroring enhancements already offered in respect of maternity leave, we may indeed see increased take up. Only time will tell.
What should employers be doing now?
- Decide whether to offer enhanced SPL pay and if so on what basis.
Will enhanced SPL pay assist in attracting and retaining talent in your organisation?What are the potential discrimination risks if you offer enhanced maternity pay but not enhanced SPL pay?What is the basis for any disparity?
- Prepare policies, forms and guidance on SPL
Establish a process to enable you and your employees to calculate whether they meet the eligibility requirements. Consider use of model notification forms. Highlight government guidance such as the Government SPL leave and pay calculator.
Consider the approach you will take to requests for discontinuous periods. How will you be able to arrange cover for sporadic absences? Will it be helpful to have the employee in at peak times or at key stages in a project for example?
What approach will you take to evidence you will require about the employer of your employee's partner? How will you deal with requests from the other parent's employer?
- Communicate about shared parental leave
Plan how to communicate this new right to employees. As an historic shift in family-friendly leave, now is a good time to explain to your employees the new rights and procedures for taking advantage of it.
- Train line mangers
Train line managers on SPL including how it will operate and how to respond to requests. The line managers will often be the first port of call for employees and it is essential that they know how SPL requests are to be handled. As fathers will have an opportunity to take a greater role in child care, line managers need to avoid out-dated preconceptions on fathers' roles or same sex couples.