The Neonatal Care (Leave and Pay) Act 2023

On 6 April 2025, the Neonatal Care (Leave and Pay) Act 2023 came into effect,  providing eligible parents with a right to up to 12 weeks statutory leave and pay when their baby requires neonatal care. The aim is to support families during a challenging time by offering them the ability to spend dedicated time with their baby whilst they are receiving medical care without it eating into their paid family leave.

What is Neonatal Care Leave?

The Act entitles employees to up to 12 weeks of leave when their baby, born after 6 April 2025, requires neonatal care within the first 28 days of birth. Parents can take one week of leave in respect of each week that the baby receives neonatal care (up to a maximum of 12 weeks) and such leave must be taken within 68 weeks of the child’s birth. It is a day one right, it is available to both parents and importantly, it is in addition to any other leave the parent may be entitled to, such as maternity, paternity or adoption leave.

How is Neonatal Care Leave taken?

How the leave can be taken will depend on what other types of parental leave the employee is entitled to and whether the leave is used whilst the baby is in hospital, or later in the 68 weeks. This is referred to as Tier 1 and Tier 2.

Employees taking maternity leave will only be able to take Tier 2 leave. Maternity leave will be triggered by the birth of the baby and cannot be stopped and restarted later. Employees will need to take their maternity leave and then their accrued Neonatal Care Leave all in one go once maternity leave is over. Conversely, employees taking paternity leave will be able to take Neonatal Care Leave more flexibly. Tier 1 will allow them to take leave whilst their baby is still in hospital. They can also take Tier 2 leave if they wish to reserve some Neonatal Care leave for after the baby has been discharged.

What about Statutory Neonatal Care Pay?

Whilst the ability to take Neonatal Care Leave is a day one right, like with other paid family leave, employees have to meet eligibility criteria in order to qualify for statutory neonatal pay, including that they have been employed for 26 weeks by the end of the week prior to the baby’s hospital admission. Statutory neonatal care pay will be at the statutory prescribed rate, which is currently the lower of £187.18 or 90% of the employee’s average weekly earnings.

6 key things to consider as an employer

The government anticipates that the new rights will benefit around 60,000 new parents so the changes are likely to be widespread and far reaching. We have identified our top 6 things for you to consider to ensure you are compliant and prepared:

1. Introduce a clear policy: Whilst the new Act seeks to allow for flexibility in order to support families during a challenging time, it does come with the price of added complexity. By contrast, the Neonatal Care policy should be clear and easily accessible, particularly as this will be a very difficult and stressful time for employees. As the notice requirements are complex (involving a two-tiered system), we recommend creating a template form for employees to complete.
2. Consider enhancements: If enhanced family leave is already on offer, you may want to consider offering any enhancements to Neonatal Care Leave and/or pay. For those that are already seeking to offer enhancements, we recommend mirroring eligibility conditions attached to other enhanced family leave/pay.
3. Extended Redundancy Protection Rights: Employees who have taken 6 continuous weeks of Neonatal Care Leave benefit from the extended redundancy protection rights, with a right to be offered a suitable alternative vacancy applying from the day after the employee has taken 6 weeks of Neonatal Care Leave until the day after the child turns 18 months old. It is important for employers to keep track of this, in the same way as for other types of parental leave and to ensure that this group is added to those entitled to priority status in the event of a redundancy.
4. Confidentiality/Data Protection: Information related to the baby’s medical condition is confidential and constitutes sensitive personal data. We recommend that you clarify what information the employee is happy for you to share and that you observe their wishes when sharing information with colleagues about the baby/the reason that they are taking Neonatal Leave. We also recommend that the sensitive personal data is processed in accordance with your Data Protection policy.
5. Notice Provisions: The notice that the employee is required to give varies depending on whether they intend to take Tier 1 or Tier 2 Leave, albeit that the legislation does allow for employers to waive notice periods. Tier 1 notice requires employees to provide weekly notice on a rolling basis. However,employees may be informed by medical staff that their baby will receive weeks or months of care. In such circumstances, you may want to consider reducing the burden on the employee at this already stressful time by waiving the weekly notice requirement and instead ask them to keep you informed when they know their circumstance is changing. Similarly, for Tier 2 leave, you may want to discuss this at the time when you would usually be in touch to discuss returning from other leave (such as maternity) or bring this in line with notice for other types of leave, rather than using the timeframes set out in the legislation.
6. How about babies taken unwell after 28 days? As the new Act only applies to babies who require neonatal care within the first 28 days of their life, employers should think about and be prepared for challenges that may be received from parents where their baby/child is admitted to hospital for an extended period after the first few weeks of their life, particularly as more employees become aware of the Neonatal Care rights.

If you would like to discuss any aspect of the new Neonatal Care Act or require a policy, please do not hesitate to contact Lousha Reynolds at lousha@refreshinglawltd.co.uk.

Refreshing Law
7 April 2025