Shared Parental Leave & Pay
The principle of SPL is simple; a new approach to allow families more choice and flexibility over how they look after children in the first year.
The principle of SPL is simple; a new approach to allow families more choice and flexibility over how they look after children in the first year. The government has estimated that around 2% of the 285,000 working couples eligible to share their leave under the new rules are likely to take up the right.
However, the rules are complex and employers have been grappling with a number of questions in order to decide their approach on a policy level.
How the new system works
Provided various qualifying criteria are met, a mother can convert up to 50 weeks of her Maternity Leave into SPL and share it with her partner. They do not need to work for the same employer and can take the time off together, separately, in one continuous period, or discontinuously. In another radical change from the previous regime, mothers and partners can move in and out of SPL over the 50 week period.
ShPP is at the same statutory rate as Statutory Maternity Pay (SMP); £139.58 per week for 39 weeks. There is, however, one major difference: ShPP is capped at £139.58 for every week, while SMP is payable at 90% of actual salary (with no cap) for the first 6 weeks of Maternity Leave.
In practice, this is likely to result in most mothers taking Maternity Leave and pay for at least 6 weeks so as to take advantage of the higher rate, if their employer does not offer enhanced Maternity or SPP. If the employer does offer enhanced pay, it will be in the employers interests to ensure the mother is still on SMP rather than ShPP for the first 6 weeks, as this means it will recover the higher rate from HMRC.
Operational & Policy issues for employers
We held a series of workshops earlier this year where we discussed with a range of schools their approach to the new regime.
The majority supported the move away from a gender based and less flexible approach to childcare, but expressed concern over potential resourcing issues, particularly where both parents work for the same school, in some cases, in the same Department, and could be off at the same time or dip in and out of school.
The complexity of the scheme, requiring a series of Notices at specific time points, was something teachers, bursars and business managers all found challenging. Most see the new regime as an opportunity to promote their schools as a family-friendly organisation seeking to facilitate a new approach to childcare. This mirrors the view of the Local Authorities we work with.
The key issue remains the decision on whether to offer enhanced pay for parents taking SPL.
Inevitably, an employer offering an enhancement to the statutory ShPP rate is likely to have a higher take up with the associated increase in cost and potential disruption.
Take, for example the employer that offers mothers enhanced Maternity Pay at 6 months full pay. If the mother decides to curtail her Maternity Leave after 3 months, will the employer allow her to convert the ‘unused’ 3 months of enhanced Maternity Pay into ShPP?
If so, to avoid a potential claim of discrimination, the employer must then offer to the partner, typically the father, an equivalent right to full pay during any period of SPL he wishes to take.
In this example, what the employer might consider is allowing a mother to use up to a maximum of 3 months of the total 6 months full pay entitlement for SPL if she chooses. Any parents, for example the father of the child, with then have a corresponding right of up to a maximum of 3 months enhanced ShPP. This is, of course, an additional expense an employer was not previously faced with.
The facility for a teacher to coordinate Maternity Leave, Return to Work and SPL with school holiday periods is something that has the potential to be particularly disruptive and add significant cost. However, the view of most is that overall, the new scheme will mean more flexible lifestyle options for staff. The ability for a mother to go back to work following childbirth and then take time off later in the year for childcare offers what for many will be an attractive option both from a childcare and career development perspective. The ability for partners to take leave under the new scheme is radical. On balance, the schools we work with see the new scheme as an opportunity to enhance a culture where staff are supported to use their entitlement to SPL thereby appealing to current and prospective staff as an employer of choice. By taking this approach organisations can raise their competitive performance and strengthen their brand.