A Guide to Shared Parental Leave

An easy-to-read explanation of Shared Parental Leave and Statutory Shared Parental Pay for small business owners

A Guide to Shared Parental Leave

Although overshadowed by other stories in the media when they were first introduced on 1 December 2014, the Shared Parental Leave and Statutory Shared Parental Pay regulations have brought about one of the biggest changes to employment law in years.

Shared Parental Leave has the potential to affect every employer at some point, but research shows uptake amongst fathers has been low. The principals of SPL are simple, but for both employers and employees, the details can be rather more complicated. Our guide will help clarify the process for employees and employers:

1. What is Shared Parental Leave?
2. Who qualifies for Shared Parental Leave?
3. Statutory Shared Parental Pay
4. Applying for Statutory Parental Leave (employees)
5. Preparing for Shared Parental Leave (employers)
6. Processing Shared Parental Leave applications (employers)
7. Keeping in touch during Shared Parental Leave
8. Potential issues to be aware of
9. Further help

1. What is Shared Parental Leave?

Shared Parental Leave (SPL) regulations were introduced on 1 December 2014 and apply to children born or adopted on or after 5 April 2015. Eligible parents are entitled to leave and pay alongside Maternity, Paternity, and Adoption leave rules, so the 52 weeks leave (39 of which are paid) for new mothers, and the two weeks of paid leave for fathers still stands.

Under these new regulations, Mothers must still take at least two weeks leave (or four weeks for manual workers to allow suitable time for recovery from the birth), but can choose to end their remaining maternity leave before their 52 weeks is up, converting it to SPL for either parent to take separately, or at the same time.

Unlike maternity and adoption leave, SPL can be stopped and restarted, and both eligible parents can apply for up to three periods of leave (or more at the employer’s discretion) so long as leave is taken in blocks of at least 1 week within a year of the birth or adoption.

2. Who Qualifies for Shared Parental Leave?

There are four stages to calculate whether or not a parent is eligible for SPL:

Stage one

To qualify for SPL, a mother must:

  • have a partner
  • be entitled to maternity/adoption leave or statutory maternity/adoption pay or maternity allowance
  • give notice to reduce her maternity/adoption leave, statutory maternity/adoption pay, or maternity allowance

Stage two

For either the mother or father to be able to take SPL, they must:

  • be an employee, not self-employed
  • share main responsibility for the new child with the other parent at the time of birth/adoption
  • notify their employer in advance and provide all the appropriate paperwork

Stage three

Either parent wishing to take SPL must pass:

  • The “Continuity of employment test”, meaning they have worked for the same employer for at least 26 weeks at the end of the 15th week before the child’s expected due date/matching date, and are still working for the employer at the start of each leave period.

Stage four

AND their partner must pass:

  • The “Employment and earnings test”, meaning that in the 66 weeks leading up to the baby’s expected due date/adoption matching date, they have worked for at least 26 weeks and earned an average of at least £30 (as of 2015) a week in any 13 weeks.

If both parents wish to take SPL, they both need to pass stages three and four, and there is the possibility that only one parent will be eligible for SPL. If one parent is self-employed, they are not eligible, but if they pass stage 4, their partner could be eligible.

3. Statutory Shared Parental Pay

Once their maternity leave begins, mothers have 39 weeks of maternity pay, adoption pay or maternity allowance, but as with SPL has the opportunity to reduce this and convert it into Shared Parental Pay (SPP) to be divided between the mother and the father. Each must provide their employer with notice of how much they want to claim.

To claim SPP, a parent must:

  • pass stages three and four – the continuity of employment test, and the employment and earnings test – as with SPL
  • have earned more than the “lower earnings limit” in the eight weeks leading up to and including the 15 week before the due date or adoption date of the child
  • still be employed by the same employer at the start of the first period in which they claim SPP

4. Applying for Statutory Parental Leave (employees)

Deciding to apply for SPL is often influenced by family circumstances, but financial calculations would also be wise. As an example: If the mother’s employer pays only statutory maternity pay but the father’s employer provides full pay for a longer period, SPL could have a large financial impact.

If parents decide not to apply for SPL, they can change their minds as long as the mother has not taken all of her maternity leave, and the one year deadline has not been met with enough time to provide eight weeks’ notice.

Parents must calculate their own SPL eligibility, and their employers are obliged to check financial details of their employees only, not their partners’. If an error is made, and employees are overpaid, employers have the right to claim that money back.

The SPL application process

Firstly

The mother must first notify her employer of her decision to end her maternity/adoption leave, providing a date. This notification is final unless:

  • it transpires that neither parent is eligible for SPL within eight weeks of first giving notice
  • if the notice is given before, it can be withdrawn up to six weeks after the birth or adoption
  • a parent dies

Secondly

  • Both parents must give their respective employers eight weeks’ notice of their entitlement to take SPL. Signed by each parent, this notice includes an indication of how much leave they are entitled to, how much they are going to take, and when they are going to take it.
  • Although these dates can be changed after notice is given, they are designed to aid the employer in preparing for leave. If the dates or split between parents changes, the parents must provide a new notification.
  • Leave must be booked eight weeks in advance.
  • Parents are entitled to book up to three periods of leave (some employers may allow more) and an employer must accept if the booking is for a continuous block of leave. If the booking is for a discontinuous block of leave – two weeks off, two weeks back at work, two weeks off, for example – the employer may refuse it. In this event, there is a 14 day discussion period designed to allow the employer and parents to come to an agreement.
  • If no agreement is met, or the employer fails to respond within those 14 days, the booking becomes a continuous block of the same length – four weeks, using the example above – starting when the first discontinuous block would have started. This start date can be changed if the parent notifies of an alternative within 19 days of the original notification, or withdraws the booking within 15 days of the original notification. A booking does not count towards the limit of three bookings if it is withdrawn at this stage.
  • Before giving formal notice, it is recommended that parents discuss the possibility of discontinuous bookings being accepted with their respective employers.
  • After a booking has been agreed, or after it has defaulted to a continuous block, parents are permitted to take their leave as booked unless the date is changed or the notification withdrawn. If a parent changes or withdraws their booking, they must provide their employer with at least eight weeks’ This will count as a new booking and so count towards the employee’s limit of three bookings, unless otherwise agreed by the employer.
  • Parents accrue annual leave, and are entitled to the same employment protections while on SPL as if they were at work – if there is a redundancy, they must be offered an alternative position if one is available, for example.

5. Preparing for Shared Parental Leave (employers)

Firstly

Employers should ensure their staff policies and handbooks are updated to include SPL and SPP policies and amend their existing maternity/paternity/adoption policies.

Secondly

To avoid claims of discrimination, employers should check levels of maternity, paternity and shared paternity pay and set the same for mothers and fathers for the same type of leave. For maternity pay, employers can choose from:

  • The statutory requirement, which is 90% of average weekly pay for six weeks, then either SMP or 90% of their average weekly pay (whichever is lower) for the remaining 33 weeks
  • An enhanced amount (such as six months’ full pay)

Although less than 1% of fathers have taken more than Ordinary Paternity Leave amount of 1-2 weeks, paternity pay is calculated in the same way:

  • 90% of average weekly pay for 6 weeks, then either SPP or 90% of their average weekly pay (whichever is lower).

Employers therefore have four options:

Option one: Offer Statutory Maternity Pay and Statutory Shared Parental Pay

This is likely to be most popular with small business with tight budgets as it’s the cheapest option. It offers equality for male and female employees, avoiding claims of discrimination, however it is the least “family friendly” option.

Option two: Offering Enhanced Maternity Pay and Statutory Shared Parental Pay

This option is more expensive as maternity leave offers more than SPL. It also favours the mother, especially mothers who choose full maternity leave over SPL. This could lead to claims of discrimination by employees and is not considered a “family friendly” option.

Option three: Statutory Maternity Pay and Enhanced Shared Parental Pay

This favours the father, penalising mothers who opt to stay on maternity leave rather than switching to SPL, which could lead to discrimination claims. This option risks discrediting the organisation’s “family friendly” views, but is cheaper than option two.

Option four: Enhanced Maternity Pay and Enhanced Shared Parental Pay

With both parents treated equally, there is no risk of discrimination claims, and would be the most “family friendly” option. It is also the most expensive for businesses, and so is likely to be popular with larger businesses with bigger budgets.

Thirdly

Employers should train managers to cope with the changes in policies and procedures and process requests for SPL should they come in.

6. Processing Shared Parental Leave applications (employers)

Although not mandatory, when a request for maternity/paternity/adoption leave comes in, it is advisable that the employer discusses SPL with the employee as an option. If a request for SPL is received, it is also advisable (but again, not mandatory) to hold an informal discussion to get an idea of the employee’s timings and periods of leave, to start planning early. It is also an opportunity to discuss discontinuous leave, after which:

  • When a formal notification of SPL is received, the employer must accept it if it is a continuous booking, ideally confirming as much to the employee in writing. If a discontinuous booking is received, the employer has 14 days to discuss it with the employee. If it is agreed, the employer must confirm as much to the employee within another 14 days. If it is not agreed, then it is advisable to hold a further discussion to come to a revised agreement, also within 14 days, and having both parties confirming the agreed dates in writing.
  • If no agreement is met, and the employer refuses the request for discontinuous leave, they should confirm this in writing within 14 days, proposing alternative dates and alternative options for the employee, which include withdrawing, agreeing modifications, or letting the default provisions kick in automatically.
  • In the event of letting the default provisions kick in, the employee has 15 days from the original formal notification to withdraw their request without it counting towards their three-booking limit.
  • If the request is not withdrawn, it will default to a continuous booking. Employees then have 19 days from the original formal notification to adjust their start date should they wish. If no adjustment is requested, leave defaults to the start date of the first period of discontinuous leave the employee requested.

7. Keeping in touch during Shared Parental Leave

During an employee’s SPL, contact with the employer may be useful for both parties. These come in two forms:

Reasonable contact occasions

These are informal updates either from the employee to the employer to keep them informed of any changes in circumstance, or from the employer to the employee about changes at the company. These could be by phone or email, as agreed.

Shared Parental Leave In Touch (SPLIT) days

More formal than reasonable contact, SPLIT days are for the employee to visit the workplace for important events like training, meetings, or to assist in a gradual return to work. Employees and employers can arrange up to 20 days, agreeing format and additional pay in advance.

8. Potential issues to be aware of

The new SPL and SPP regulations offer flexibility to families, but there are cultural changes to accept. Fathers are often paid more than mothers, and as such, may be less tempted to request SPL due to the financial implications. Employers, however, face further burden:

Administration

SPL is a complicated process. As well as dealing with requests, responses and deadlines, employers must adjust policies, train managers, adjust payroll, and react to any other issues that arise.

Discrimination

Choosing policies that offer equal levels of pay will help avoid claims of discrimination. Smaller businesses who may not have these policies in place are at risk of making mistakes in their procedures.

Logistics

Covering staff on SPL can be tricky, especially if they are taking it in three blocks. Maternity leave is taken in one block, and so far easier to manage, and with the potential to receive only eight weeks’ notice, employers may feel the pressure.

Culture

If a business employs few or no women, SPL brings with it a call for a change in culture. They face the possibility of their workforce requesting up to 49 weeks of SPL, which they will be unable to refuse.

9. Further help

The gov.uk website offers an overview for SPL and SPP, and details of eligibility and calculating terms. These new rules are complex and so if further information is required, enlisting a specialist employment law solicitor would be helpful.


Minal Backhouse is the managing director Backhouse Solicitors, and is a solicitor specialising in employment law.

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