Understanding the Neonatal Care (Leave and Pay) Act

The Neonatal Care (Leave and Pay) Act 2023 introduces new rights for employees whose children require neonatal care. It provides up to 12 weeks of Neonatal Care Leave (NCL) and Statutory Neonatal Care Pay (SNCP) to support parents facing extended hospital stays for their newborns. This Act applies to children who enter neonatal care within 28 days of birth and remain in care for at least seven continuous days (beginning on day two, effectively making it an eight-day period before eligibility begins).

Who is eligible?

Neonatal Care Leave: Available to employees from day one of employment, with no minimum service requirement. To qualify, the employee must be the child’s parent, intended parent, adopter, or partner of the child’s mother or adopter and have responsibility for the child’s upbringing.
Statutory Neonatal Care Pay: To receive SNCP, an employee must have been continuously employed for at least 26 weeks before the relevant qualifying period and earn above the lower earnings limit.

How does Neonatal Care Leave work?

Employees are entitled to one week of NCL for every qualifying period (seven consecutive days of neonatal care), up to a maximum of 12 weeks. Leave must be taken within 68 weeks of birth and in blocks of full weeks. The structure of leave entitlement is divided into two periods. The tier 1 period begins on the first day of neonatal care and continues for seven days after the child leaves neonatal care. During this time, leave can be taken in non-consecutive weeks. The tier 2 period follows the tier 1 period and lasts until 68 weeks after birth. Any leave taken in this period must be in consecutive weeks.

What are the notice requirements for taking NCL?

Employees must give notice to their employer specifying:

Their name and the child’s birth date.
The start and end dates of the neonatal care period.
The number of weeks of leave they wish to take.
Confirmation that they meet the eligibility criteria.

The notice period differs for tier 1 and tier 2 period, so it is important to seek guidance to ensure compliance with the notification procedures.

Statutory Neonatal Care Pay (SNCP)

SNCP is available to employees who qualify for statutory maternity, paternity, or adoption pay and is paid at the same rate as statutory paternity pay. The right to SNCP applies to children born on or after 6 April 2025. SNCP can be taken in line with NCL, meaning that in a tier 1 period, it can be taken in blocks of whole weeks, whether consecutive or not. In a tier 2 period, SNCP must be taken in consecutive weeks.

The maximum number of week’s SNCP is 12 weeks. To be eligible for SNCP, the employee’s normal weekly earnings must not be less than the lower earning limit in force at the end of the relevant week (or relevant qualifying period).

What is the relevant qualifying period for SNCP?

The relevant qualifying period varies depending on the circumstances:

For birth cases: The relevant qualifying period is the 15th week before the expected week of childbirth.

For adoption cases: It is the week in which the adopter is notified of being matched with a child.
For other cases (such as early births): The relevant week is the one immediately before the start of neonatal care.
If a child is born before the relevant week, the employee must have remained in continuous employment since birth and would have met the 26-week service requirement had the birth not been early.

What else should be considered?

Multiple births: Employees can accrue NCL entitlement for each child receiving neonatal care but can only claim NCL for one child at a time during an overlapping period.
Outpatient care: The definition of ‘continuous neonatal care’ is unclear in cases where a child receives outpatient treatment between hospital stays. If more information regarding this is released, we will update this blog accordingly.
Interaction with other leave: Employees on maternity leave or other statutory family leave can add NCL onto the end of their leave, provided it is within the 68-week timeframe.

What should employers consider?

Employers should prepare for the administrative requirements, including managing varying notice periods and record-keeping for SNCP claims. Regarding pensions, employers will have to make their usual pension contributions as though the employee was receiving full pay, whereas any minimum employee contributions will be reduced to account for their reduced pay during NCL.

Due to the potential overlap with different types of statutory and non- statutory leave, some employers may consider incorporating NCL into existing policies, such as a maternity, paternity or adoption policies. However, due to the complexity of the notification requirements a separate policy may be preferable. If you would like assistance with either updating your policies or assistance with drafting a Neonatal Care Leave Policy, please get in contact with our Employment Law team.

Closing thoughts

The Neonatal Care (Leave and Pay) Act 2023 introduces important rights for employees but comes with complexities in its implementation. Employers and employees should ensure they fully understand eligibility criteria, notice periods, and pay entitlements. If you need guidance on how the Neonatal Care (Leave and Pay) Act 2023, impacts your organisation and what measures and policies need to be put in place to ensure compliance, please contact our Employment Law team for a free consultation meeting.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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