The Impact of UK’s Shared Parental Leave Law – Ask #HR Bartender
I recently received a question about the United Kingdom’s Shared Parental Leave law. Simply put – what is it, how does it work, and most importantly how does it impact companies and employees.
Since I do not live in the UK, I reached out to Michael Carty from XpertHR to help me understand this new piece of legislation. Michael is the editor of XpertHR’s Benchmarking data service. I’ve known Michael for years and he graciously agreed to share his knowledge.
And if you’re wondering why a U.S. blog would write about UK employment law, it’s simple. We can no longer think in terms of “my” country and “your” country. Issues like parental leave exist everywhere. Laws in the UK could easily get proposed in the U.S. and vice versa.
Michael, I know this first question is a toughie. Can you give us a brief description of the United Kingdom’s new shared parental leave law?
The new right applies to working couples with babies due on or after 5 April 2015, provided each parent qualifies for leave and pay in their own right. There are similar arrangements for adoptive parents. You can find full details of shared parental leave in the XpertHR employment law manual.
Shared parental leave also offers parents flexibility in terms of how and when they take the leave. Eligible parents can request discontinuous periods of leave – that is, more than one period of shared parental leave, in blocks of at least a week.
All shared parental leave must be taken before the child’s first birthday or the first anniversary of the adoption placement.
Parents on shared parental leave can share up to 37 weeks’ statutory shared parental pay between them, at a flat rate of £139.58 per week from April 2015, or 90% of the employee’s earnings if this is less. The rate of statutory shared parental pay is the same as the rate of statutory maternity pay. For comparison purposes, average weekly earnings for UK workers are £459, according to latest official data.
One in five employers is planning to enhance their shared parental pay offering above the statutory minimum, new XpertHR Benchmarking research on preparations for shared parental leave finds.
Why was this new law created?
[Michael] The UK Government says shared parental leave is a family-friendly right, designed to promote a culture shift toward flexible working options for modern families.
Employment Relations Minister Jo Swinson recently wrote in Personnel Today of her hopes that ‘the outdated assumption that child care is only an issue for mums will be firmly put to bed as shared parental leave becomes more established.’
However, the XpertHR survey suggests that the UK HR profession has mixed views on shared parental leave. HR supports shared parental leave in principle. But it is concerned that the new right is complex to administer in practice.
I completely understand how a complex new law of this magnitude can be overwhelming. I know XpertHR has created several models and forms to help organizations manage this new law. But beyond the paperwork, is there a benefit for employers with this new law?
[Michael] Overwhelming is probably the right word!
HR welcomes the opportunity to offer shared parental leave to new parents. But nearly half of HR professionals taking part in our survey think that the introduction of shared parental leave has created a significant administrative workload for them.
The wording of shared parental leave legislation attracted particular criticism. For example, one HR professional described it as ‘user-unfriendly.’ There was also a general feeling that a lot of the heavy lifting on making shared parental leave work has been left to HR. Things should become clearer once the level of takeup is known, and when and if related case law provides further clarity around the new right.
But – for all its concerns about how shared parental leave will work in practice – HR strongly supports its underlying principles and purpose. Not one HR professional in our survey questioned whether or not it was right for the Government to introduce legislation to encourage both parents to take equal responsibility for child care.
What do employees need to know about the shared parental leave law?
[Michael] Above all, eligible employees need to know about the options available to them.
However, only a minority of employers in our survey have taken any action to raise awareness of the right to shared parental leave. Further, the survey suggests that HR lacks confidence in line managers when it comes to understanding and communicating the intricacies of the new right.
Eligible employees also need to weigh up the implications of moving to shared parental pay. Some could find themselves earning significantly less than normal while they take shared parental leave.
Shared parental leave could therefore be unaffordable for some eligible couples. One HR professional in our survey was concerned ‘that shared parental leave is going to be a more viable option for high earners, who are more likely to be able to afford to take it.’
Lastly, I see laws like this one being debated not only in the UK but globally. Do you see any global trends regarding parental rights that organizations should pay attention to?
[Michael] The groundswell of international interest in shared parental leave suggests it is an idea whose time has come.
I’d advise your readers to pay attention to the experience of employers in countries where shared parental leave arrangements have been introduced. Besides the UK, some other countries have their own shared parental leave offerings. For example, Sweden offers an ‘equality bonus’ – a tax credit – to encourage a more equal takeup of parental leave by men and women.
Think about what a right to shared parental leave means in practice, and how it might affect your organization. Ask yourself these questions:
- What level of pay would you offer to employees taking shared parental leave?
- What level of takeup could you expect?
- Would there be any issues around arranging cover for employees on shared parental leave?
My thanks to Michael for sharing his knowledge. If you’re not already reading the XpertHR blog, I would recommend adding it to your list. They also have a LinkedIn group for discussing U.S. compliance, legal changes and best practices.
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I must say as Michael and I were putting this post together, I was reminded of the same challenges and concerns I felt when the Family and Medical Leave Act (FMLA) was introduced years ago. Yes, there might be some nuances but there are also some big similarities. We might be thousands of miles away, but as HR pros, we’re facing the same challenges.
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