Benefits of Offering Enhanced Maternity and Paternity Pay

Up and down the UK, many businesses already offer enhanced maternity or paternity leave and pay for their employees. While more and more companies are now offering enhanced maternity and paternity pay, you must consider whether it’s the right step for your business, especially for working parents.

It’s important to analyse whether this measure would be cost effective and effective in the workplace – luckily if you read our article below, you can discover the benefits of offering enhanced maternity pay and the aspects you need to be aware of. 

Childcare is often a major stressor and a major expense for working parents. If your business can stand out from the crowd and offer real support to your employees who are expecting, you stand a real chance in retaining your existing employees and recruiting top talent.

While the exact payment will differ from employer to employer, enhanced maternity pay or paternity pay is an additional payment on top of statutory maternity and paternity pay. 

For example, some employers may offer full pay for 26 weeks of maternity leave and then 13 weeks of statutory maternity pay.

How you choose to enhance your maternity pay is completely up to you as an employer. The most common option is that employers offer their employees six weeks of full pay, instead of only paying 90% of their employee’s wage for the first six weeks, as is mandatory with statutory maternity pay. 

Additionally, many businesses offer generous pay packets or bonuses when the employees come back to work. 

Some businesses are increasing the amount of enhanced paternity leave they give their employees from the mandatory two weeks. If businesses increase the amount of paternity leave, then they may also offer statutory paternity pay too.

If a potential employee is thinking about growing their family, then a company which offers enhanced paternity and maternity pay will be very attractive. 

Many businesses are facing hiring challenges, and you’ll need something to stand out from the crowd to attract the talent you want in your business. 

Your business will not only look appealing to new recruits, but it’ll also improve staff retention, too. 

Even though enhanced maternity and enhanced paternity pay will cost your business more than statutory maternity and statutory paternity pay, these additional benefits can help keep employee turnover low and recruitment costs to a minimum.

If you offer enhanced maternity pay, you prove to your employees that you’re serious about employee wellbeing. 

This way, you can improve brand image, staff morale and your employees’ career satisfaction. 

The happier your employees are, the more engaged and productive they will be. Happy employees mean work produced to a higher quality, resulting in a better bottom line for your business.

It’s crucial to consider taking action to close the gender pay gap. One of the main ways that women lose out on earnings is when they become a mother and take maternity leave. 

One of the very first steps to reduce the gender gap is to provide both enhanced maternity and paternity pay.

While there are many combined actions you need to take to close the gender pay gap, enhanced maternity and paternity pay is a great first step.

Absolutely. Employees can use both their SPLIT and KIT days to work part time before their parental leave is over. 

Potentially, your employees could work two KIT days in a five day week to slowly ease them back into the work environment. Using KIT or SPLIT days could be helpful if your employee wants to work in a more flexible manner, and you will be able to find out whether a flexible work model will work for their workload.

While enhanced maternity pay and enhanced paternity pay could actually look very expensive at first glance, when you factor in other costs, the introduction of enhanced pay could actually save your business money. 

The additional costs are typically outweighed by the benefits that boost engagement and employee wellbeing.

Retention rates are typically higher and therefore, your business will spend less on recruitment costs.

If you’ve worked out the costs for enhanced maternity or paternity pay and it’s too expensive for your business right now, you might decide not to offer enhanced maternity pay. However, there are some other benefits you could decide to offer if you can’t offer enhanced maternity pay. 

If you offer enhanced maternity or paternity pay, you should seriously consider extending the same kind of benefits to adoption leave and shared parental leave. 

While there is no legal requirement, not giving these different types of leave equal treatment could result in an employee filing a discrimination form. 

If you offer different levels of pay for different types of family leave this could very well sow the seeds of resentment and disharmony.

Enhanced paternity pay varies by employer, offering more generous terms than the statutory minimum. For example, a tech company might provide 100% salary for 2 weeks, while a retail chain could extend paternity leave to 3 weeks at full pay. 

Financial firms might offer staggered pay, such as a full salary in the first week and a reduced rate in the second. 

These examples illustrate how businesses adapt their benefits to support new fathers, balancing financial capabilities with the goal of fostering a family-friendly work environment and promoting work-life balance.

There could also be a chance that your other employees who are not parents could feel that colleagues who are growing their family are given preferential treatment. 

To avoid this, make sure that you offer all your employees similar benefits such as flexible working. 

You should make sure that there is sufficient cover when your employees are away on leave, so there’s no chance that no one on your team will feel overworked.

Enhanced paternity leave refers to company policies that offer more generous terms than the statutory minimum required by law. This can include longer leave durations, higher pay than the statutory rate, or both. 

While statutory paternity leave in the UK, for example, typically allows up to 2 weeks off with pay at either £156.66 per week or 90% of the average weekly earnings (whichever is lower), enhanced paternity leave might offer full pay for the same period or extend the leave duration with varying pay rates.

The Paternity Leave (Amendment) Regulations 2024, set to take effect on 8 March and applicable solely to children expected to be born in the week starting 6 April or later, will enable fathers or partners to split their statutory paternity leave into separate one-week segments instead of having to use it in a single stretch.

If you’ve decided to offer enhanced maternity pay, great! There are a few practical things to consider before you launch this new policy: 

• How much will you offer as part of your enhanced maternity pay.
• If there are any additional conditions your employees will have to meet to qualify for enhanced maternity pay.
• Review contracts and make sure that they include enhanced maternity or paternity pay, and ensure that you insert a clause indicating that you may withdraw or amend enhanced maternity pay at any time.

If you’ve worked out that you can’t afford enhanced maternity pay, but you want to support your colleagues, here are some suggestions of other benefits you could offer: 

• Paid time off to attend antenatal appointments
• Gifts before the employee goes on parental leave
• A salary sacrifice scheme for childcare
• Paid leave for when there are any emergencies regarding their dependants
• Remote working or flexibility around working hours
• The opportunity to return to work part-time instead

At Payroll Solutions, we can offer both payroll and HR software. If you decide to offer your employees enhanced maternity and paternity pay, it will be easier to track who is on leave and to make sure that all of your employees are paid the correct amounts.

How much paternity leave are fathers entitled to in UK?

While the statutory entitlement for fathers or partners in the UK is up to 2 weeks of paternity leave, some employers offer what is known as enhanced paternity leave. 

This is a more generous provision than the legal minimum and can include longer periods of leave, allowing fathers additional time off to bond with their new child and support their partner. 

Enhanced paternity leave policies vary significantly between different organisations, reflecting a commitment to supporting work-life balance and recognising the importance of parental involvement in early childrearing.

Is paternity pay full pay UK?

Standard Statutory Paternity Pay (SPP) in the UK is not full pay. It is paid at a rate of £156.66 per week or 90% of the father’s average weekly earnings, whichever is lower, for the 2022/2023 tax year. 

This rate is subject to change each tax year. However, some employers offer enhanced paternity pay, which can be closer to full pay or even full pay for a certain period. 

This varies widely between employers, so it’s essential to check the specific policy of your workplace.

Is paternity leave 2 weeks or 14 days?

When we talk about 2 weeks of paternity leave in the UK, it’s based on the working week, not a continuous 14-day period. 

This means if a father typically works from Monday to Friday, two weeks of paternity leave would cover 10 working days. The leave doesn’t have to start on the day the child is born but must be taken within 56 days after the birth or adoption.

This allows some flexibility for fathers to decide the most beneficial time to take their leave, considering their family and work situation.

What is the duration of paternity leave UK?

The duration of paternity leave in the UK is specifically up to 2 weeks. Fathers can choose to take either one week or two consecutive weeks. Splitting these two weeks into non-consecutive periods isn’t typically allowed under standard statutory rules. 

The leave can start on any day of the week, but it must be taken within the first 56 days after the child is born or placed with the family in the case of adoption. 

Beyond paternity leave, there’s a broader concept of enhanced parental leave, which includes more generous leave provisions for both mothers and fathers. 

This can include extended periods of leave at full pay or a significant percentage of the salary, well above the statutory minimum. 

Enhanced parental leave policies are designed to offer parents the flexibility and financial support needed to care for their new child without the immediate pressure to return to work.