Shared Parental Leave and your employer obligations

An important part of being an employer is dealing with maternity, and to a lesser extent at present, paternity leave. The fact of the matter is that as an employer there is a high statistical chance that one or more of your workforce will become a parent during their employment with you and new regulations from April 2015 give more flexibility to families in deciding how their child is cared for in the first year. Shared Parental Leave and Pay will be available to many employees. From April 2015 you will need to be prepared to fulfill your obligations as an employer.  

Shared Parental Leave – how it works

Currently, mothers are entitled to 52 weeks statutory maternity leave (SML), of which 39 weeks are paid under statutory maternity pay (SMP). Fathers are able to take 2 weeks as paternity leave, which is also paid. This system is both inflexible and dated so changes are coming into force from April 2015 that enable qualifying mothers in employment to cease their SML early and share the remainder with the father or their partner under Shared Paternity Leave (SPL) and Shared Paternity Pay (ShPP). There is a minimum requirement for mothers to take at least 2 weeks of their SML leaving a potential 50 weeks to share under SPL, of which 37 can be paid under ShPP. Both mother and father need to be eligible to apply. As an employer it’s important to know the facts

Is your employee eligible for SPL?

It is a pre-requisite that the mother is eligible for SML and or SMP before they can apply for SPL. Further conditions include:

• By the end of the 15^th week prior to the date the baby is due, your employee must have worked for you for a continuous period of 26 weeks
• Your employee must continue to be employed by you whilst taking SPL

If the basic criteria aren’t met you have the right to refuse SPL if you choose. Many employers may aim to find a solution though.

Business operation planning around SPL

Assuming your employee is eligible, there are a number of ways in which an employee can plan their SPL. As one option, the employee can take the whole of their share of the SPL in one block. For example, the mother takes 22 weeks as SML, leaving 30 weeks to share. The father then uses his block of 15 weeks followed by the mother using her 15 weeks. Alternatively, the leave can be split into a maximum of three separate blocks, for example the mother could take her leave in three blocks of five weeks. If the mother and father choose they can take their leave together or separately. Either way though there is a minimum of eight weeks notice required for the employer before a block of leave commences. This is to ease business operation planning around SPL. There is an option for employees to request to further break down their SPL, say working alternate weeks. However, you as an employer have the right to refuse this if it isn’t practical, which will largely depend on the role. If an employee is eligible for SPL then you don’t have the right to refuse the requested blocks of leave, provided they meet the eight-week notice period and are not split into more than three blocks.

Employers – action required

The payroll system you use will need to be updated to reflect SPL and ShPP. Payments may be fragmented depending on the “work versus leave” schedule agreed. HMRC require that the following records are kept for three years from the relevant tax year:

• Evidence that the employee was eligible for ShPP
• The date the ShPP payments commenced, the payments and the amounts claimed
• Any unpaid weeks giving a reason

Summary of points to note

• SPL will be an option for eligible new parents for babies with a due date on or after 5 April 2015
• Both parents must be eligible to apply for SPL and ShPP
• The mother must take at least two weeks SML and SMP before SPL and ShPP can be applied
• The parents can choose to take their SPL together or separately
• SPL can be taken in either one block or split into a maximum of three blocks
• Further splitting of these blocks is an option subject to the employer’s consent
• Employees need to give a minimum of eight weeks notice before a block of leave starts, hence why employers can expect requests to come in from February 2015
• SPL must be taken before the first birthday of the child
• ShPP is £138.18 per week or 90% or average weekly earnings, whichever is the lower
• Employees need to update their payroll systems and keep records for three years

If you found this article useful share it with other commercial business owners who can learn about the changes coming into force in the next few months. Or, for further help with understanding SPL and ShPP Figurit can answer your questions. T: 020 7376 9333 E: info@figurit.com