HR 28 July 2017

An employer’s guide to shared parental leave and pay

Pregnant Business Woman
Shared parental leave was introduced to offer new parents greater flexibility

Why have so few parents taken up the shared parental leave scheme, introduced in 2014? It is because of a lack of understanding of how it works, both by employers and staff, writes employment law director at Peninsula, Alan Price.

Shared parental leave (ShPL) was introduced in December 2014 to encourage parents to share care responsibilities, but it can be confusing for parents and employers alike.

Although shared parental leave offers flexibility to parents, there are some limitations. To make sense of it all, here is a shared parental leave guide for employers.

The basics

Shared parental leave allows parents to share their statutory leave. The parents can either take leave at the same time or take it in turns to have time off work.

Another option is for one parent to use it alone to extend their statutory leave or take discontinuous leave while their partner returns to work.

How shared parental leave entitlement works

To qualify for shared parental leave, both parents have to meet certain eligibility tests. An employee has to have been employed for 26 weeks by the end of the fifteenth week before the expected week of childbirth, or the week they are notified of being matched with a child for adoption.

The partner has to meet the employment and earnings test, which means they must have worked for at least 26 weeks in the 66 weeks before the due date and earned an average of £30 in any 13 of these weeks.

If both parents qualify, they can share the parental leave. In some cases, one of the parents can use shared parental leave if their partner isn’t eligible. For example, the partner isn’t an employee but still passes the employment and earnings tests.

Ways parents can share their leave

The mother has to give notice to you, the employer, that she will end her maternity or adoption leave and transfer any remaining weeks left to take as shared parental leave, creating a maximum of 50 weeks shared parental leave.

To book leave, your employee has a maximum of three notices to submit to you. You can’t refuse a notice containing a period of continuous leave.

You can refuse a notice containing a period of discontinuous leave, for example eight weeks of leave, followed by four weeks at work, followed by another eight weeks of leave. Refusal starts a 14-day discussion period where you can discuss alternatives.

If you can’t reach an agreement at the end of that period, your employee can withdraw their notice and it won’t count.

Or, if you don’t reach an agreement but the notice isn’t withdrawn, the total amount of shared parental leave requested will automatically become a continuous 16-week block of leave.

What to pay staff on shared parental leave

Qualifying staff are entitled to receive statutory shared parental pay (ShPP) at a set rate of £140.98 per week or 90 per cent of average weekly earnings (whichever is lower).

To qualify for shared parental pay, the employee has to be eligible for statutory maternity or adoption pay and has a partner that meets the earnings and employment test.

Shared parental pay is only payable if the mother or adopter ends her entitlement to statutory maternity or adoption pay before she uses her full 39 weeks’ entitlement. Any remaining weeks of pay will convert to ShPP.

Do employers have to enhance shared parental pay?

You can choose to offer extra pay for those on family leave, and most companies that do offer it via family-friendly policies. There’s uncertainty about whether enhancing certain aspects of shared parental pay is discriminatory or not.

Enhancing shared parental pay for female employees but not male employees

This is discrimination as it treats male employees less favourably on the grounds of their gender.

At a recent tribunal case, an employee was awarded nearly £30,000 after the employer gave full pay to female employees but statutory pay to male employees on shared parental leave.

Enhancing maternity pay but not shared parental pay

It’s an established thought that you can enhance maternity pay but not Shared Parental Pay due to the special recognition for mothers taking maternity leave.

To take Shared Parental Leave, mothers give up this protection to share their leave with their partner. Also, both males and females can take shared parental leave, so there would be no difference in treatment between the sexes.

But an employment tribunal recently found it was sex discrimination to pay 14 weeks’ full pay for maternity leave and only statutory pay for those taking shared parental leave.

The outcome is only at tribunal level and based on the specific facts of the case. Other employment tribunals are not bound to follow the decision, and the employer has already lodged an appeal.

For now, you should review your family pay policies and ensure that any decision to enhance pay is supported by a business reason to do so.

Alan Price is employment law director at Peninsula

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