News & Events
Neonatal care leave and pay: What employers need to know
9th April 2025
From 6 April 2025, a new statutory right to neonatal care leave and pay will be introduced, expected to benefit around 60,000 working parents across the UK. This change will have significant implications for employers, who will need to ensure compliance with the new regulations. In this article, Rebecca Gotch, Rowleys Payroll Manager explains more about neonatal care leave and what employers need to consider.
What is neonatal care leave?
Neonatal care leave is a new statutory right designed to support parents of babies who require extended hospital care after birth. It applies to parents of infants who are admitted to neonatal care within the first 28 days of life and who have a continuous hospital care for at least seven full days. The aim of this leave is to provide additional time for parents to care for their baby without using up their existing maternity, paternity, or shared parental leave entitlements. Eligible parents can take up to 12 weeks of neonatal care leave, and those meeting the earnings and service criteria may also qualify for Statutory Neonatal Care Pay (SNCP).
Key points for employers
- Day one right to leave – Neonatal care leave will be available to all eligible employees from their first day in a new job. This aligns with other recent employment rights reforms that provide immediate protection and flexibility for workers.
- Eligibility for Statutory Neonatal Care Pay (SNCP) – Unlike the leave entitlement, pay will only be available to employees who meet certain requirements:
- A minimum earnings threshold (similar to other statutory payments like Statutory Maternity Pay).
- A continuity of service requirement.
- Duration of leave and pay – Eligible parents will be entitled to up to 12 weeks of leave and, if they meet the pay eligibility criteria, statutory payments during this period. This is in addition to other existing parental leave entitlements, such as maternity and paternity leave.
- Who qualifies?: The leave applies to parents of babies admitted into neonatal care within the first 28 days of life and who have continuous hospital care for at least seven full days.
Payroll considerations:
- Processing Statutory Neonatal Care Pay – Organisations will need to set up systems to calculate and process this new statutory payment, ensuring it is recorded correctly alongside other statutory leave entitlements.
- Employer responsibilities – Employers will need to update their policies and payroll software to accommodate the new entitlement.
- Funding and reimbursement: As with other statutory payments, businesses may be able to recover a portion of the cost through HMRC. Payroll teams should review government guidance on reclaiming Statutory Neonatal Care Pay.
Next steps for employers
The introduction of neonatal care leave adds another layer of complexity to payroll management. Miscalculations, non-compliance, or failure to properly track leave entitlements can lead to financial and legal risks.
In order to ensure compliance employers need to:
- Review payroll systems to ensure that payroll software and processes are updated to accommodate this new statutory right.
- If necessary, work alongside HR teams to educate employees about their new rights and ensure compliance with the regulations.
This new entitlement reflects a broader effort to support working families and improve workplace protections. As these changes take effect, ensuring compliance is crucial for businesses of all sizes. Rowleys’ payroll experts can help you implement the new requirements smoothly and efficiently. Get in touch with our team today to discuss how we can support your business and keep your payroll processes compliant.