United Kingdom: Low take-up of Shared Parental Leave scheme
The Shared Parental Leave (SPL) regulations came into force on the 1st of December 2014 and apply to eligible parents where a baby is due, or a child is placed for adoption, on or after 5 April 2015. This report outlines the details of the scheme and then presents the findings of a number of evaluative surveys, which have identified low take-up. The report will then focus on the reasons behind low use and will summarise the recommendations for improvements proposed by key bodies.
Details of the Scheme – Eligibility Criteria
SPL enables mothers to end their maternity leave early (although they must still take the compulsory maternity leave element after giving birth) and convert the remainder of that leave into shared leave which either parent can take. However, such conversion to SPL is subject to parents meeting eligibility rules in relation to continuity of employment and earnings.
Thus, for a mother or adopter to qualify, she must be entitled to some form of maternity or adoption entitlement, have given notice to curtail it and must share the main responsibility for caring for the child with the named partner. For a parent to be eligible to take Shared Parental Leave, they must be an employee and pass the continuity of employment test i.e. they must have worked for the same employer for at least 26 weeks at the end of the 15th week before the week in which the child is due (or at the week in which an adopter was notified of having been matched with a child or adoption) and must still be employed in the first week that SPL is to be taken. Moreover, they must pass the employment and earnings test: they must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned above the maternity allowance threshold of £30 a week in 13 of those 66 weeks. In turn, the other parent in the family must also meet the employment and earnings test - where both parents satisfy these tests, they will be able to share the leave.
SPL may be taken at any time within the period which begins on the date the child is born/date of the placement and ends 52 weeks after that date. Parents can take leave at different times or both may take it at the same time. Each eligible parent can give their employer up to 3 separate notices booking or varying leave, although notice must be given at least eight weeks before the leave is due to start. Leave must be taken in complete weeks and may be taken either in a continuous period, which an employer cannot refuse, or in a discontinuous period, which the employer can refuse. If a request for discontinuous leave is refused then the total amount of leave requested in the notice will automatically become a continuous block unless it is withdrawn.
To qualify for Statutory Shared Parental Pay (ShPP) a parent must pass the continuity of employment test and have earned an average salary of the lower earnings limit of £111 for the 8 weeks' prior to the 15th week before the expected due date or matching date. The other parent in the family must meet the employment and earnings test. ShPP is currently paid at the rate of £140.98 a week or 90% of a person’s average weekly earnings, whichever is lower. This rate is the same as Statutory Maternity Pay (SMP) except that during the first 6 weeks SMP is paid at 90% of whatever a person earns (with no maximum).
Evaluations of the Scheme: A Summary of Main Findings
By the Government’s own admission, take-up rates have been low, estimated at between 2% and 8%. Currently, it does not officially track numbers; it has indicated that it will be conducting a systematic evaluation of SPL and ShPP, but has not to date released any details of how this will be conducted.
Figures from Her Majesty’s Revenue and Customs (HMRC) revealed that just 3,000 parents took SPL during the first three months of 2016, compared with 155,000 mothers who took maternity leave and 52,000 fathers who took paternity leave during an equivalent three month period during tax year 2013-14. The figures were obtained under a freedom of information request submitted by law firm EMW.
Moreover, a number of recent surveys have found that take-up of SPL has been low. Thus, a survey of over 1,000 HR professionals by the Chartered Institute of Personnel and Development (CIPD) at the end of 2016 year found that, on average, just 5% of new fathers and 8% of new mothers have opted for SPL since its introduction. Moreover, just one organisation in five (21%) said they had received requests from male employees to take up SPL since April 2015. Another study in 2016 by the Working Families charity, based on data from 940,000 employees, showed that between 0.5% and 2% of eligible fathers had made use of the new provision by October 2015.
More recently in May 2017, research by solicitors’ firm Milners estimates that fewer than one in a 1,000 employees have taken up SPL since its launch in 2015. The study found that just 54 of more than 56,000 people surveyed had availed themselves of the scheme.
Barriers to Take-Up
The Working Families charity argues that although there is ‘willingness and aspiration’ on the part of fathers, families ‘are unlikely to make use of SPL unless it makes financial sense for them to do so.’ The charity thus calls on the government to equalise Statutory Maternity Pay (SMP) and Shared Parental Pay (ShPP) ‘to prevent SPL being a second-class option’ and to encourage more fathers to use it (SMP for eligible employees can be paid for up to 39 weeks, at 90% of the parent’s average weekly earnings (AWE) for the first six weeks, and £140.98 or 90% of their AWE (whichever is lower) for the remaining 33 weeks. SPL is paid at £140.98 or 90% of their AWE for the entire SPL period if taken up by the other partner).
The charity also said that employers ‘going beyond the minimum pay for SPL would also make it a more realistic option for more families’, as the statutory flat rate is equivalent to less than a quarter of men’s median full-time weekly earnings. Evidence for this was provided by research carried out by XpertHR Benchmarking, which found that employers that enhance ShPP are twice as likely to receive shared parental leave requests as those who offer the statutory rate. The study identifies that one employer in four either enhances shared parental pay above the statutory minimum or plans to over the coming year, but over double this number currently offer enhanced maternity pay. A number of other organisations have similarly identified that the majority of employers do not offer an enhanced rate of SPL for the second parent, meaning they are in receipt of the statutory minimum for the duration of their leave – with an understandably detrimental impact on take-up.
Further, analysis by the TUC in 2015 showed that the strict eligibility rules constituted a barrier with 40% of working fathers with a child aged under one not qualifying for SPL because their partner is not in paid work (fathers are only entitled to SPL if the mother of their child is entitled to maternity leave).
Other identified barriers include the complexity of applying for SPL, as illustrated by the government’s 66-page technical guide, as well organisational factors, including employer attitudes. The Working Families charity found that nearly half (45%) of fathers in the Working Families annual Modern Families Index in 2015 felt their employer would not approve of them making use of SPL. Similarly, the Fawcett Society found that 35% of fathers in employment with children under the age of 18 believe that fathers who take time off to care for children are not supported by their employers. Moreover, a 2016 survey by My Family Care found that half of the male employees in the 200 organisations surveyed believed that SPL was perceived negatively at work.
Recommendations as to how to improve take-up
Working Families points to evaluations of parental leave schemes in other countries, which have found that those which stimulate the best take-up rate by fathers are those which reserve an individual, non-transferable right to parental leave for fathers (on a ‘use it or lose it basis’), provide a high replacement rate for earnings at near-salary replacement levels while the father is on leave and permit flexibility in when and how the leave may be taken. It thus recommends reforms to SPL along these lines, along with the provision of clear communication and training to organisations so that line managers have the tools to deal with SPL effectively, support employees who wish to take it, and understand the role it plays in the wider flexible culture of the organisation.