A Guide to Neonatal Care Leave and Pay for UK Businesses

The landscape of workforce entitlements in the UK is evolving. Staying ahead of legislative changes is essential. A significant recent development is the introduction of neonatal care leave and pay, which offers vital support to parents when their newborn requires hospital care. This article offers clear guidance on understanding your obligations, ensuring compliance, and fostering a supportive workplace, in order to help you navigate this legislation with confidence.

What is neonatal care leave and who qualifies?

Neonatal care leave (NCL) is a new statutory entitlement for eligible parents. It grants them time off if their baby is admitted to a hospital’s neonatal care unit. This leave is designed to help parents be with their child without the added stress of job commitments. The right to this leave is a ‘day one’ right, meaning a worker is entitled to it from their first day of employment.

To qualify for neonatal care leave, an applicant must be a parent or close relative of a child who is admitted to neonatal care, within 28 days of the birth, and for a continuous period of at least a week. One week’s leave is available for each week of neonatal care, up to 68 days after the birth, and up to a maximum of 12 weeks, for employees who have a parental or other personal close relationship with the child. This ensures that various family structures are supported during such a challenging time.

Statutory Neonatal Care Pay: your financial obligations

Alongside the entitlement to leave, the new law introduces Statutory Neonatal Care Pay (SNCP). This is the pay employers must offer to eligible staff during their neonatal care leave. To be eligible for SNCP, an employee must have accumulated at least 26 weeks of continuous service by the end of the week immediately preceding the start of the leave period. They must also have average weekly earnings of at least the National Insurance lower earnings limit, which is a figure set by the government each tax year.

The rate for neonatal care pay is the same as that prescribed for other family-related statutory payments, such as maternity and paternity pay, which the government sets annually. This is welcome financial assistance for staff, allowing them to focus on their baby’s health without worrying about the loss of income. For more information on other related leave types, check out our guide on maternity leave in the UK.

Employer responsibilities and how to comply

Compliance with the Neonatal Care (Leave and Pay) Act 2023, which came into effect in April 2025, demands proactive steps from employers. Failure to comply can lead to significant penalties, with employment tribunal claims for denying rightful leave or pay potentially leading to financial compensation awards, and significant damage to the company’s reputation.

Your primary responsibility is to recognise an employee’s right to this leave and pay, and to process their request correctly and compassionately.

Here are the key steps for ensuring compliance:

1. Update your policies: The most important step is to create or update your existing family leave policies. A clear and comprehensive neonatal care leave policy is fundamental. This document should outline the entitlement, eligibility requirements, the notice process, and the pay arrangements. Having this policy in place ensures consistency and clarity for both managers and affected staff.

2. Understand notice requirements: An employee must give their employer notice in order to take neonatal care leave. Notice requirements differ between two tiers. Tier 1 applies when the baby is in neonatal care and up to 1 week after discharge, and requires notice any time before the work week to be taken as leave begins. The notice is short considering the unpredictable nature of neonatal care admissions. Tier 2 applies a week after discharge, and requires 15 days’ notice for one week of leave, and 28 days’ notice for two or more consecutive weeks of leave. Employers should be prepared to handle these requests with flexibility.

3. Record-keeping: Maintain accurate records of neonatal care leave taken by employees, including the start and end dates and the statutory pay provided. This is important for both legal compliance and good financial administration.

4. Protection from detriment: Like other forms of family-related leave, employees taking neonatal care leave are protected from suffering any detriment or dismissal for having taken their leave. Their employment rights are therefore fully protected during this time.

The application process

The application process should be straightforward. An employee will need to inform their employer that their baby has been admitted to neonatal care and that they wish to take leave. They will also need to present supporting evidence for their claim. This will typically be a letter or a formal document from the neonatal unit confirming the newborn’s admission and the duration of their stay. The employee must also submit a written declaration that they meet the eligibility conditions for leave and pay.

Further support and resources

Navigating the legislation may be challenging, but there are various resources available to help. For a detailed breakdown of the law, read our article dedicated to the Neonatal Care Bill linked to above. It’s also important to understand the details on how pay during leave is calculated, which can be complex. For example, the principles of the Alabaster ruling on pay rises during maternity leave may be relevant. For a broader view on family-related entitlements, also consider reviewing our guide on Shared Parental Leave.