Parental leave and pay: Supporting parents and achieving equality

Overview

This section explores the objectives of Parental Leave and Pay; how Government policy supports parents and employers; the factors which enable parents to combine work and childcare and the impact of each of these factors; and looks at high level options for reforming parental leave and pay.

Below is useful information on what changes we could make and the trade-offs these may bring. 

Parental leave factors which support parents to combine work with childcare responsibilities

There are a range of variables which could potentially be leveraged:  

• The length of leave and when it can be taken (e.g. only in the first year or over the lifetime of the child);
• The rate of pay (which can vary over the leave period);
• Whether leave is transferrable between parents or given on a ‘use it or lose it’ basis;
• Whether the parental leave can be taken flexibly (e.g. in days or half-days; in blocks separated by periods at work; and whether it can be stopped and re-started);
• Who the leave and pay applies to (e.g. just employees or all working parents); and
• Whether parents can take time off work together, sequentially or both.

Making the right trade-offs and choices to support families

Reforming one or more parental leave and pay policies may necessitate trade-offs around:

• How entitlements to leave and/or pay are split between parents; 
• Balancing flexibility and choice for families and incentivising parental behaviours (e.g. solo childcare by fathers);
• Creating more rules and incentives to determine how leave is taken and shared, versus simplicity for parents to navigate the system and make choices;
• Giving parents the flexibility to take leave when it suits them and giving their employers and co-workers certainty;
• How the costs of parental leave and pay are shared between families, employers and the Government;
• How much support is provided at the time of the birth versus giving parents opportunities to take parental leave when their child is older;
• How support is distributed across families – and whether the generosity of support should vary according to a family’s income;
• How the costs are distributed across types of employers – including, the relative support provided to SMEs and large employers;
• How employers who provide enhanced contractual leave and pay would respond to Government enhancing family-related statutory pay (e.g. would they extend the period of contractual leave and pay or re-cycle the savings?); and
• The level of support offered to families with different characteristics.

The full consultation document can be found below