Helping parents through neonatal challenges: a guide for employers

The introduction of Neonatal Care Leave and Pay from 6 April 2025 marked a significant development in employment law, offering vital support to working parents during one of the most challenging periods of early parenthood. 

The rules are complicated and not easy to understand. The government appears to have recognised this and has published a detailed technical guidance document. This article provides a structured overview of that guidance, breaking down each section to help you understand your responsibilities so you can support employees effectively.

Purpose and scope of the entitlement

Neonatal Care Leave is a statutory right for eligible employees whose baby is admitted to neonatal care within 28 days of birth and remains in care for at least seven continuous days. The leave applies to babies born on or after 6 April 2025 and is designed to be taken in addition to other statutory entitlements such as maternity, paternity, adoption, and shared parental leave.

While Neonatal Care Leave is a day-one right, Statutory Neonatal Care Pay requires employees to have at least 26 weeks of continuous service and earnings above the Lower Earnings Limit. The pay is available for up to 12 weeks and is calculated at the lower of £187.18 per week (reviewed annually in April) or 90% of the employee’s average weekly earnings.

Eligibility criteria and definitions

The guidance sets out clearly explains who qualifies for leave and pay. Eligible individuals include biological parents, adoptive parents, intended parents in surrogacy arrangements, and partners of the child’s mother. The entitlement is triggered by the baby’s admission to a neonatal care unit within the first 28 days of life and a minimum stay of seven continuous full days.

Importantly, the entitlement is calculated per baby. In cases of multiple births, each child’s admission to neonatal care can generate separate leave and pay entitlements.

Tiered structure of leave

There is a two-tier structure for how leave can be taken. Tier 1 leave is available while the baby is still receiving neonatal care or within the first week after discharge. This leave can be taken in weekly blocks and may be interrupted by other types of statutory leave.

Tier 2 leave begins more than a week after the baby has left neonatal care and must be taken in one continuous block. 

Both types of leave must be taken within 68 weeks of the child’s birth, allowing flexibility for parents to manage their leave around the baby’s care needs and other statutory entitlements.

Complex scenarios and special cases

To support you in handling less straightforward cases, the guidance addresses a range of complex scenarios. 

1. Multiple births

In cases where twins, triplets, or more are born and admitted to neonatal care, the entitlement to leave and pay is calculated per child. This means that if two babies are admitted and meet the qualifying criteria, the employee may be entitled to up to 24 weeks of leave and pay -12 weeks for each child. You must track each child’s admission and care duration separately to determine the correct entitlement. 

2. Same baby - admitted more than once

The guidance also covers multiple admissions into neonatal care. If a baby is discharged and later readmitted, each qualifying admission may generate a new entitlement, provided the baby meets the criteria of being admitted within 28 days of birth and remaining in care for at least seven full, continuous days. However, if the baby is discharged before completing the seven-day threshold, the entitlement does not accrue for that admission.

Interaction with other leave types

Neonatal Care Leave must be coordinated with other statutory leave entitlements. 

Maternity and adoption leave must be taken before Neonatal Care Leave. If an employee is already on maternity or adoption leave when their baby is admitted to neonatal care, they cannot begin Neonatal Care Leave until their existing entitlement ends. This sequencing ensures that the primary leave associated with childbirth or adoption is preserved and not disrupted by the neonatal leave. 

But paternity leave and shared parental leave can interrupt Tier 1 Neonatal Care Leave. For example, if an employee begins Neonatal Care Leave while the baby is in hospital but has pre-booked paternity leave, they may pause their Neonatal Care Leave to take paternity leave and then resume the remaining neonatal leave afterwards. This flexibility allows employees to use their entitlements in a way that best suits their family’s needs.

In cases where a baby dies while in neonatal care, the employee may still be entitled to parental bereavement leave. The guidance emphasises the need for you to handle such situations with sensitivity and compassion.

Calculating and reclaiming pay

The guidance offers detailed instructions on how to calculate Statutory Neonatal Care Pay. You must assess the employee’s average weekly earnings and confirm that they meet the Lower Earnings Limit. Pay is accrued in arrears and must be reported to HMRC.

You can reclaim the cost of statutory payments. Small employers may recover up to 108.5% of the payments, while large employers can reclaim up to 92%. Worked examples and formulas are included in the guidance to assist with these calculations.

Supporting employees and best practice

Beyond statutory compliance, the guidance encourages you to offer additional support to affected employees. This includes developing clear internal policies, maintaining open communication, and providing emotional and practical support.

You are advised to act flexibly, especially in cases where employees do not meet the eligibility criteria but are still facing significant challenges due to their baby’s health. 

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