Neonatal Care Leave and Pay: What You Need to Know as an Employer
A major change in UK employment law comes into effect next week with the introduction of neonatal care leave and pay. This new entitlement gives parents of hospitalised newborns more time off work and financial support at one of the most difficult points in their lives.
For employers, this is more than just a compliance box to tick. It’s a chance to review how your business supports employees during times of crisis—and to align your policies with a more compassionate, modern approach to family leave.
What Is Neonatal Care Leave?
Neonatal care leave allows eligible employees to take up to 12 weeks of additional paid leave when their baby is admitted to hospital in the first four weeks of life and stays for at least seven consecutive days.
This leave is:
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Separate from and in addition to maternity, paternity, adoption, and shared parental leave
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Paid at the statutory rate (or 90% of earnings if lower)
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Available per child, not per pregnancy
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Can be taken in blocks over a 68-week period from the birth date
The purpose is to give parents time and headspace to focus on their child’s health without the pressure of returning to work too soon.
Who Is Eligible?
The eligibility criteria are fairly straightforward but must be clearly communicated to employees. To qualify for neonatal leave and pay, the employee must:
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Be an employee, not a worker or contractor
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Have at least 26 weeks of continuous service by the 15th week before the baby is due
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Earn at least the Lower Earnings Limit (currently £123 per week in 2024/25)
Both parents can qualify for the leave and pay, provided they meet the criteria and are responsible for the child’s care. This includes:
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Same-sex parents
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Adoptive parents
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Surrogacy arrangements
This inclusive approach reflects the reality of modern family life and helps create a more supportive workplace culture for all.
What Is Statutory Neonatal Pay?
Eligible employees will receive Statutory Neonatal Pay during their leave, paid at the same rate as other family-related statutory payments. That means:
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They’ll receive £184.03 per week or 90% of their average weekly earnings, whichever is lower (based on 2024/25 rates)
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Employers can reclaim the statutory pay through HMRC using existing payroll processes
This reduces the financial burden for employers, but there’s also an opportunity here. If your business wants to stand out as family-friendly, consider offering enhanced neonatal pay.
Many organisations already offer enhanced maternity or paternity pay. Extending that principle to neonatal care shows a strong commitment to employee wellbeing—and it’s likely to improve retention and morale, especially among experienced staff who may be juggling family responsibilities.
What Employers Need to Do Now
With the legislation coming into force in just a few days, there’s work to do—quickly. HR teams should take the following steps to prepare:
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Update family leave policies – Make sure neonatal leave is clearly outlined and accessible
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Brief payroll and HR systems teams – Ensure your payroll software is configured to handle the new pay structure
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Train managers – Equip line managers to handle sensitive conversations with empathy and confidence
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Communicate with staff – Let your teams know this support is available, and how they can access it
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Review insurance policies – Some business or income protection insurance may cover neonatal scenarios
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Plan for staffing cover – Consider how you’ll manage unplanned absences if employees need to take this leave at short notice
Don’t overlook the need for clear documentation. Employees may need to provide proof of hospital admission or confirmation from the NHS trust, so your internal processes should be simple and supportive—not bureaucratic.
Flexibility in How Leave Can Be Taken
One feature of the new entitlement is that it doesn’t require parents to take their leave all at once. The 12 weeks of neonatal care leave can be used in blocks over a 68-week period following the birth.
This flexibility is designed to support the unpredictable nature of neonatal care, where hospital stays, follow-up appointments, and recovery can vary significantly from family to family.
From an employer’s perspective, this adds some administrative complexity. You’ll need to:
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Configure your HR system (e.g. Breathe HR) to manage multiple leave blocks
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Keep accurate records of usage over time
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Plan for recurring or staggered absences
But for affected employees, this flexibility is critical—and your ability to manage it well reflects the strength of your HR function.
Check Your Insurance Cover
One often-overlooked area is insurance. Some business insurance or income protection policies may cover neonatal scenarios, allowing employers to:
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Offer full or enhanced pay
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Claim reimbursement through both HMRC and their insurer
This can be a win-win. Your employee receives greater support at no extra net cost to your business.
Review your existing policies or speak to your insurance provider to check if this is an option.
Why It Matters Beyond the Legal Requirement
Yes, this is a legal obligation—but it’s also about doing the right thing. Neonatal care situations are emotionally and physically draining for families. The pressure of balancing work and a hospitalised newborn can take a huge toll.
Charities like New Life Special Care Babies offer insight into the lived experience of parents navigating neonatal care. As an employer, you have a role to play in easing that journey.
Going beyond the minimum—whether by offering enhanced pay, additional support, or simple compassion—can:
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Strengthen loyalty and trust
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Reduce stress-related absence
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Improve employee wellbeing and retention
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Boost your reputation as a responsible employer
This is particularly relevant for small and medium businesses, where the employee-employer relationship is more personal. Supporting someone through a crisis builds lasting goodwill.
Final Thoughts
The introduction of neonatal care leave and pay is a meaningful step in UK employment law—and a chance for your business to align compliance with compassion.
If you haven’t already:
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Update your family leave policies
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Make sure your team knows how to manage this
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Consider whether enhanced support could fit your culture
At KUHR, we help businesses navigate employment law changes with practical, people-focused advice. Our HR Health Check can identify gaps in your policies, and our HR Protect packages give you tailored support when you need it most.
