What do you need to know about April’s new neonatal care leave? 

By alisonbarlow|Jan 31, 2025|10:21 pm GMT

In mid-January the government confirmed that employees with babies in neonatal care will be given additional leave as a first day right from 6 April, 2025. The Neonatal Care (Leave and Pay) Act 2023 was largely expected to come into force in April, so it won’t be a huge surprise to employers.

As it stands, those with newborns in neonatal care have to rely on either their employer’s discretion or other types of leave, such as parental leave, while their children are in hospital. These aren’t always well suited to prolonged hospital stays, meaning parents can be forced to return to work before their babies are discharged. The new legislation introduces a dedicated neonatal care leave (NCL), allowing both parents to take one week’s leave for every week their child is in neonatal care. It also provides statutory neonatal care pay for eligible employees.

Who qualifies for neonatal care leave?

Parents with children who are admitted into neonatal care within 28 days of their birth and who spend at least seven consecutive days in hospital will be eligible for NCL.

This will be a day-one right, meaning employers must provide it from the first day employees start working for them. Eligible parents can take up to 12 weeks of leave as well as any other leave entitlement, such as maternity or paternity leave.

While leave itself is a day-one right, employees must have been employed for at least 26 weeks before the leave request date to qualify for statutory neonatal leave pay. They must also earn above the Lower Earnings Limit (LEL) – which increases to £6,500 for the tax year 2025/2026.

Getting to grips with the tiered leave structure

There are two tiers to NCL, with a maximum of 12 weeks of leave allowed across both tiers. Tier one is applicable when a child is in neonatal care, while tier two applies after the child has left care.

Tier one

Tier one leave applies when a child 28 days old or younger is in neonatal care, and can be taken flexibly or in a full-week block while the child is in hospital or for the first few weeks following discharge. With tier one leave, parents can leave work at short notice to be with their baby.

If an employee is already on pre-booked leave, such as shared parental leave, then they can pause their NCL entitlement to accommodate the pre-booked leave and start it again when the pre-booked leave finishes.

Tier two

Any remaining leave accrued from the end of tier one falls into tier two neonatal care leave. This can be taken at any time until the child is 68 weeks old but must be booked off in a single, continuous block.

The estimated cost of NCL

The cost implications of NCL should be relatively minor. Neonatal care leave will join the list of statutory parental leaves – Statutory Maternity, Statutory Paternity, Statutory Adoption, Statutory Parental Bereavement, and Statutory Shared Parental Pay – for which employers can reclaim 92% of pay.

Employers with a national insurance Class 1 liability of less than £45,000 for the previous tax year may qualify for Small Employer’s Relief. From April 2025, this will be 108.5% of statutory pay.

How do operators prepare for the incoming legislation?

It’s important to update policies and communicate these changes to staff ahead of April 6th so that they understand their entitlements.

If you already pay employees when their child is admitted to neonatal care, make sure your existing policy at least meets the new requirements set out under The Neonatal Care (Leave and Pay) Act 2023. You may need to update payroll processes since you will now be able to claim back part of that payment from the Government.

As with all policy changes, make sure that any updates are reflected across the full suite of your internal documents – policies and procedures, employee handbooks, and employment contracts – both online and offline. Communicate these changes to employees on multiple channels so everyone is aware of their entitlement and the procedure for claiming this type of leave if they need it.

The impact of NCL

While the direct costs associated with NCL are relatively small, the big challenge for operators lies in managing the operational impact of this leave. As the cost of labour increases and teams shrink, covering unexpected leave for an indefinite period will put pressure on other members of staff. It may also lead to additional expenses if agency workers are needed to plug scheduling gaps. Managing these extended absences and navigating reimbursement processes could also add to the administrative burden on managers and payroll staff.

However, this leave does bring advantages. It provides support for staff members through an incredibly difficult time, fostering trust and loyalty among employees and ensuring they don’t feel pressured to return to work too soon following the trauma of having a very sick baby.

By addressing the challenges presented by NCL through proactive planning – putting policies and procedures in place – operators can balance the additional operational demands created by this new Act with the need to support employees. This ensures compliance and reinforces a genuine commitment to supporting staff during difficult times, creating a more compassionate working environment.

Want more? Discover these resources:

• A Survival Guide to 2025 HR & Payroll Report
• 2025 HR & Payroll Legislation Checklist
• 3 Steps to Avoid Accidental Non-Compliance with National Minimum Wage