The business case for better paternity legislation

Law firm Beecham Peacock says enhancing paternity leave is a vital way of attracting and retaining staff.

Paternity Leave and flexible working opportunities

 

It’s no secret that more and more of us are choosing not to have children. The UK birth rate has declined to the lowest levels in over a decade, while the average age of parents has hit a record high.

It’s an issue that economists and some politicians are beginning to sweat over, concerned about the future implications this will have on employment and the UK economy.

It’s left many wondering what key factors are causing younger generations to choose not to have children, or to have them later in life, and what steps the government and businesses need to implement to support this new outlook.

Recent data by charity and awareness group Pregnant Then Screwed has shone a light on one of the areas that may be causing fewer couples to consider having children – UK paternity law. They found that only 29% of fathers could access enhanced paternity leave, with just over half of fathers taking two weeks or less away from work.

With the vast majority of working mothers taking statutory maternity leave, and only 10% receiving occupational maternity leave (leave paid for by the employer), young adults are feeling the financial strain of raising a family now more than ever.

With expert advice from the employment law specialists at Beecham Peacock, we’ve uncovered the practices that businesses need to implement to comply with paternity law, what knock-on effect it can have for your workforce and, ultimately, why it matters for the UK employment sector.

Key findings:

 The UK birth rate is at its lowest since 2002.
 The average age of new parents is significantly higher than the generations before them.
 The UK has the lowest rates of statutory paternity leave in Europe.
 62% of fathers take no paternity leave and one-third return to work early.
 Money has been reported as the biggest concern for those considering raising a child.

What’s happening to the UK birth rate?

Some politicians, most recently MP Miriam Cates, have highlighted the dramatic shift in birth rates and the age of new parents over the last decade. Now at their lowest since 2002, when they sat at a rate of 596k, the most recent UK birth statistics reported 600k births. To put these figures into context, the post-war baby boom in 1920 saw 957k births, while baby boomers born in 1964 were one of 875k births that year.

These comparisons are significant, especially when you consider the average age of new parents from their respective generations. In 1964, the average age of a mother during childbirth was 27.3 in England and Wales. This is drastically younger than more recent data, which reveals the average age of mothers during childbirth as 30.9.

This is reflective of a trend we are seeing across many sectors, where younger people are reaching the so-called ‘traditional’ milestones of adulthood later than previous generations. The generational age gap between first-time buyers is getting wider, stalling wage growth since 2008 continues to worsen and the cost of living crisis continues to affect the savings of young adults.

In short, raising a child is costly and cost is at the forefront of struggling young adults’ minds now more than ever. So, with the government worried about the declining birth rate’s long-term effect, how does the law protect and encourage potential parents who may be dismayed by the thought of leaving work to raise a child?

What are the current UK paternity laws?

The UK has the least generous paternity laws in Europe, so it is important to fully understand the rights of employees to avoid potential disgruntlement or legal action.

Lisa Branker, Head of Employment and HR at Beecham Peacock, outlines the key aspects to remember when it comes to paternity leave requests:

“All fathers in the UK are eligible for statutory paternity pay, which currently sits at £184.03 or 90% of the employee’s average weekly earnings, depending on which is lower. Paternity pay is subject to tax and NI deductions,” Lisa explains. “If you’re unsure, employers can calculate exactly how much paternity an employee will receive through the government’s maternity and paternity calculator. It’s a brilliant resource for businesses.”

“Fathers can take one to two weeks’ leave. If it’s two weeks leave, this can be taken together or separately. This doesn’t change if the employee is having multiple children, such as twins,” she continues. “Once a business has been informed of a paternity leave request, the start date of the leave must be the actual date of the birth. Leave must finish within 52 weeks of the birth, or due date if the baby arrives earlier than expected.”

For adopting fathers, paternity leave is available, but there are different stipulations to consider.

“For an adopting father to take paternity leave, the employee must have been continuously employed by the business for at least 26 weeks up to the end of any day in the qualifying week, also known as the week they were matched with a child,” says Lisa. “If they are adopting from overseas, the employee must still have been employed for at least 26 weeks, but the qualifying week is the week that the child enters the UK, or from when the employee wants the pay or leave to start.

“For full eligibility, the father must be classed as an employee and earn an average of £123 gross over an eight-week relevant period. They must also give the employer the correct notice and take time off to look after the child.”

Why does paternity leave matter?

Put rather bluntly by MP Miriam Cates:“The economic consequences of this shift are mind-blowing.” As far as the economy goes, it’s right to show concern over the state of the current paternity laws.

New data analysis from the Centre for Progressive Policy (CPC) has found that countries with more than six weeks of paid paternity leave have a smaller gender wage gap (by 4%) and a smaller labour force participation gap (by 3.7%) than other countries. Closing these gaps by the same percentage in all authorities would increase the UK’s economic output by £23bn.

There is, however, also a human element to this issue – one which should not be overlooked as less important than the economy.

Taking time off work to raise a child causes stress for families who receive a lower rate of leave. New research from MetLife has found that one in five parents fear taking time off work to look after their children. Additionally, Maternity Action found that money was the biggest concern for parents about having a child, with 71% citing household income as a cause of stress.

This concern around finances causes many fathers to forego paternity leave altogether, with more than 62% of fathers taking no leave at all.

How better paternity leave can support your business?

Research has shown that stronger paternity compensation can be a significant driving factor in making job offers more competitive.

Gen Z and Millennial workers are far more likely than other generations to leave a job for another post that has stronger paternity rights. 52% of Gen Z and 55% of millennials say parental leave would be a consideration in finding new employment.

Parental leave isn’t a rest from employment, it’s an entirely new kind of work. 32% of fathers don’t feel ready to return to work after taking paternity leave, noting tiredness and stress as contributing factors. Enhanced paternity leave can give returning employees the space to be more productive, increase loyalty to the business and improve their well-being.

“When employees feel tired, rundown and stressed, they are more likely to take sick leave,” says Lisa. “One in five working adults take time off due to stress in the UK, so finding ways to mitigate this can lead to higher retention of work.”

How can businesses implement a fair paternity policy?

“Make sure your employees are aware of all their options,” says Lisa. “One policy many are unaware of is Shared Parental Leave and Pay. This allows employees to share their parental leave, splitting the time and pay into blocks in order to equally share the responsibility of raising a child.

“A couple can split up to 50 weeks of leave and 37 weeks of pay, but they do have to take less maternity or adoption leave and pay to do so.”

Businesses can also stand out from the competition by offering enhanced paternity pay, making their workplace more desirable in a competitive working landscape.

“Last year we started to see more UK companies announce their enhanced maternity and paternity leave,” Lisa tells us. “Bouygues UK implemented eight weeks paternity leave on full pay, whereas retailer Marks & Spencer announced six weeks full paternity pay.

“As these businesses take steps to strengthen their parental leave policies, the positive reaction from employees, customers and the press means more companies are following suit.”

As we look towards the second half of 2024, we can expect to see more businesses taking a closer look at parental leave policies – and with the result of a general election inbound, this is a topic of debate that won’t be going away any time soon.



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