Neonatal care leave and pay in 2025: What HR and payroll teams need to know

If you’re an employer, HR professional, or part of a payroll team, there’s a big change on the horizon.

The Neonatal Care (Leave and Pay) Act 2023 comes into force in April 2025, giving parents of babies in neonatal care the right to take extra paid leave.

This change is an opportunity to support your people when they need it most—and get ahead by ensuring your organisation is fully prepared.

This article will cover everything you need to know on the Act, what it means for parents, how HR and payroll professionals prepare for the changes ahead, and how your team can better foster trust and compassion within your business.

Here’s what we cover:

What Is the Neonatal Care (Leave and Pay) Act 2023?

The Neonatal Care (Leave and Pay) Act 2023 is designed to provide vital support to parents during an incredibly challenging time.

If an employee’s baby requires neonatal care—hospital care for newborns—from April 2025, they will have the right to additional leave and, if eligible, statutory neonatal care pay.

Here’s a summary of the key details:

Who is eligible?

Any parent (or primary carer) of a baby born on or after 6 April 2025 admitted to neonatal care for at least seven continuous days within the first 28 days of life.

What is the timeline for coverage?

Up to 12 weeks per affected child, on top of any existing parental leave entitlements.

What is the Neonatal Care Act pay?

Eligible employees will receive statutory neonatal care pay at the current statutory rate for the duration of their leave.

Who is included under the Neonatal Care Act coverage?

This includes mothers, fathers, adopters, intended parents in surrogacy arrangements, and other primary carers.

Neonatal care leave is a day-one right expected to benefit around 60,000 new parents.

What the Neonatal Care Act means for parents in your workforce

For the parents in your workforce, this legislation offers a lifeline.

It provides the time, financial support, and job security they need to be there for their baby during neonatal care without additional worries.

Parents can spend crucial bonding time with their baby during hospital care. The statutory pay helps reduce financial stress at an already difficult time.

Job security can also help to lighten the load. Parents’ roles are protected, giving them peace of mind while on leave.

Supporting your employees through this period is more than a legal obligation. It’s a chance to demonstrate that your organisation truly cares about the wellbeing of its most important resource: the people

How businesses can prepare for the new legislation

Getting ready for this new legislation isn’t just about compliance. It’s about creating a supportive workplace.

Here are six practical steps to help you prepare:

1. Update your HR policies

Start by reviewing your family leave and pay policies. Are they ready for this change? Here’s how to get them in shape:

• Review and revise: take a moment to review and revise your existing policies. Consider adding neonatal care leave or, even better, creating a special policy just for neonatal care leave to support families in your workforce.
• Be clear: define eligibility criteria, the application process, and required evidence, such as medical documentation.
• Communicate change: use your employee handbook, intranet, or team briefings to share the updates with your workforce.

2. Get your payroll systems ready

Your payroll systems will need to handle statutory neonatal care pay without any hiccups.

To get ready, keep your software up to date.

Partner with your payroll provider to make sure the system accurately calculates and processes neonatal care pay. (And check with your software vendor as your payroll software may update automatically.)

If you’re not using HR and payroll software yet, this is a good opportunity to consider using it.

Then, test the workflow. Run tests with different scenarios to ensure accuracy.

Finally, make sure your payroll staff understand how to manage claims for neonatal care pay.

3. Educate your managers and HR team

Managers and HR professionals are your frontline for supporting employees. Equip them to handle questions and provide guidance effectively:

• Run training sessions: let your employees know about the new legislation and its implications, and provide training so they know what’s required of them.
• Create FAQs: provide resources such as cheat sheets to help them navigate employee inquiries.
• Promote empathy: encourage managers to approach these situations with compassion and understanding at every step.

4. Communicate with your employees

Proactive communication can prevent confusion and build trust. Here’s how to keep your employees informed:

• Raise awareness: use newsletters, team briefings, and email updates to explain neonatal care leave and pay.
• Share easy steps: make sure employees have all the details on how to request leave and payment, along with the necessary documents they need to provide.
• Stay accessible: ensure employees know who to contact if they have further questions or need support.

5. Get your legal and compliance teams onboard

Ensuring compliance with the new legislation is essential to avoid future complications.

Start by having your updated policies and processes reviewed by your legal team. They can help confirm that everything aligns with the latest government requirements.

Stay informed by keeping an eye on any government updates or guidance related to the Act. Regular reviews of your policies and processes will help you maintain compliance and avoid unexpected issues.

6. Create a culture of care

This legislation gives you an opportunity to strengthen your reputation as a caring and supportive employer.

Consider enhancing your benefits package by offering additional leave or pay beyond the statutory minimum where possible.

Also, check in with employees who take neonatal care leave to show ongoing support and help them return back to work smoothly.

Encourage a system for employee feedback. Listening to your employees can be invaluable as this provides direct insights on how your organisation can further improve its policies and processes to better support them in the future.

By creating a compassionate and flexible work environment, you not only comply with the law but also foster a workplace culture that values and supports employees during some of life’s most challenging moments.

Final thoughts

Supporting employees during neonatal care is more than just compliance. It’s about fostering trust and building a compassionate workplace culture.

When you’re proactive and prepared, you show your people that they’re valued, even in the most challenging times.

By following these steps, you’ll ensure your organisation is ready for the Neonatal Care (Leave and Pay) Act 2023. Your policies will be clear, your systems will work seamlessly, and your employees will feel supported when they need it most.