Whether or not to enhance shared parental pay beyond the statutory minimum – set at a flat rate of £139.58 per week from 5 April 2015, or 90 per cent of the employee’s earnings if this is less – is a key decision for employers formulating a policy on the new right to shared parental pay.
Across the survey sample, two-thirds of organisations currently enhance maternity pay. One in five respondents plans to enhance shared parental pay above the statutory minimum, although a further one in five are undecided on their approach – despite the right coming in in less than a week’s time.
Any decision to offer enhanced shared parental pay could have major cost implications for the organisation if take-up of shared parental leave is high.
Yet four-fifths of organisations surveyed by XpertHR say they do not have a sense of the number of employees that may take shared parental leave over the next 12 months.
This means that the likely cost of offering enhanced shared parental pay is an unknown quantity for most organisations.
Some small businesses are concerned that they could face indirect discrimination claims if they continue to enhance maternity pay but do not enhance shared parental pay. A small-business respondent comments: “As we enhance maternity pay quite significantly, we are now faced with the challenge of determining whether enhancing both maternity pay and shared parental pay will be affordable.”
The new right to shared parental leave and shared parental pay applies to babies due, or children placed for adoption, on or after 5 April 2015.
Two-fifths of the employers surveyed by XpertHR in mid-March 2015 currently have a shared parental leave policy in place, although most of the remainder are planning to introduce a shared parental leave policy within the next six months.
Some employers are taking a ‘wait and see’ approach when it comes to informing their workforce about shared parental leave. More than two-fifths have so far taken no action to raise awareness of the new right. Just over a quarter of employers have communicated their policy to all employees, rising to one in three public-sector organisations.
A further one in five employers has provided line managers with training or guidelines on shared parental leave, rising to one in four among the largest, 1,000-plus employee, organisations.
However, employers have little confidence in line managers when it comes to shared parental leave. Only 7.1 per cent agreed or strongly agreed that their line managers demonstrate a good level of comprehension of shared parental leave arrangements, reflecting the complexity of the legislation.
Speaking about the findings XpertHR Benchmarking editor Michael Carty said: “It is encouraging to see that employers universally welcome the new right to shared parental leave in principle. When formulating their shared parental leave policy, employers need to balance their concerns over the affordability of the new right with consideration of how best to make their shared parental leave offering attractive to and useful for eligible employees.”