From 5 April this year, new parental leave legislation came into effect, giving men and women the option to share child care over the course of a year.
This progressive employment legislation will undoubtedly give greater flexibility and choice to families. It will enable more men to be involved in child care and bond with their babies in their important first year and give women the freedom to return to work earlier if they wish which could enhance their career prospects. It could also help companies improve employee engagement and inspire greater staff loyalty.
However, the jury is out on how businesses will cope. Some of the harshest critics have been the Small Business Federation and The Institute of Directors who claims the legislation could create a “nightmare” and chaos for employers, particularly small businesses.
For any business, the changes will mean additional costs and more time and resources needed as well as, increased administration. However, the impact will be felt most acutely in a small business. If a couple of employed by the same company or several employees are taking leave simultaneously, the impact could be quite devastating.
So what changes will the new legislation deliver?
Previously, fathers were entitled to one or two weeks paid ordinary paternity leave, or up to 26 weeks’ paid additional paternity leave – but only if the mother or co-adopter returned to work.
Shared paternity legislation replaces this and now fathers’ (or a mothers’ partner) can take up to 50 weeks of leave, which is particularly useful for families where the mother is the higher earner. Statutory shared parental pay is 90% of your average weekly earnings, or £139.58 a week, whichever is lower.
Couples can take all or part of the leave at the same time and each parent may take up to three separate blocks of leave. Both parents need to be working, but only one has to be an employee. By the 15th week before their baby is due, one parent must have been continuously employed for six months.
Providing an employee gives eight weeks’ written notice before the leave commences, an employer has no right to refuse any requests for continuous leave, however, they can refuse requests for discontinuous leave.
According to the Department for Business, Innovation and skills, 285,000 working couples would be eligible to share leave under the new rules, however the government has predicted that take up will be low in the first year.
How will businesses be impacted?
Some larger companies like Virgin are embracing the legislation and seeing it as an opportunity to provide even better employee benefits. This month, Virgin announced that new Dads who have been employed by Virgin for four years can take a year’s paternity leave at full pay, whereas those who have worked for two years will receive 25 per cent of their pay during paternity leave.
Whilst Virgin may have the capacity to offer what is surely the UK’s most generous paternity package, many small businesses will struggle to manage the impact and potential disruption of shared paternity leave.
For starters, the eight week notice period employees must give before embarking on their leave might sound reasonable, but in reality it doesn’t give businesses much time to find, recruit and train a replacement.
It might even be impossible to find a willing replacement to cover what could be a very short periods of employment, particularly if the employment is in small chunks and completely ad hoc.
>Related: Top five HR myths for small businesses
If employers fail to find people to step in then colleagues will have to pick up additional workloads, which could impact their morale and well-being. Businesses will also find it extremely difficult to plan their projects and ensure they are appropriately staffed.
From an administration perspective, there will be challenges too. Small businesses that are managing their employee absence on spread sheets simply won’t cope. Many are already overburdened by managing absence requests for holidays and staff sickness. They rely on absence requests being emailed to an HR manager, the request being approved and being sent back and then finally input into a spread sheets. This process is time consuming, it costs money and it is not 100% accurate, which means that some companies aren’t fully measuring the extent of their absence.
Whilst the uptake of the shared parental leave is currently low, this will change – particularly with trailblazing companies like Virgin heralding the benefits of paternity leave.
With the legislation still in its early days, now is the ideal time for businesses to think ahead and put in place systems that will be able to support this in the future, including software that can manage the administration of the shared paternity leave and minimise the cost of administration and reduce the disruption to business and impact on productivity levels.
Such systems can also help businesses manage and measure any kind of absence – whether it is shared paternity leave, sickness, holidays or even dental appointments. Having up to date information enables businesses to manage the new legislation effectively and also confidently plan ahead in terms of strategy, projects and resources.
Further reading: Achieving employee engagement through enablement