Shared Parental Leave – ‘No Brainer’ or ‘Nuisance’?

Just as SMEs are starting to get to grips with the additional administration and cost that the Pension Auto Enrolment legislation will bring to their doors, the Government has confirmed details of the new Shared Parental Leave (SPL) arrangement which will be introduced in 2015.

SPL outlined in the Children and Families Bill 2013 will enable a woman to convert some of her maternity leave into leave which can then be shared with her partner.  Although the Government has listened to the outcome of the consultation on this initiative, and some of the initial proposals have been changed, this will create significant concern amongst small and medium sized companies about how SPL will impact their business.

There is no dispute that that providing more flexibility and enabling more women to stay on their career path and return to work after a period of maternity leave is a positive thing for business, however it is critical that the administration burden of putting new arrangements in place does not create an unmanageable situation for smaller companies.  These companies do not have the luxury of volumes of staff nor the sophisticated infrastructure of the larger companies and so the implications for them will be much greater.

The Institute of Directors has commented on the initiative stating that “The IoD understands the case for a system of shared parental leave and how it could help to widen the talent pool available to employers. Unfortunately, today’s announcements heap yet more burdens on struggling employers.” The IOD further added that it creates a “nightmare” for employers and “employers will — once again — have to absorb the cost of adapting and implementing this new system”.

There is a consistent theme with the SPL, pension auto enrolment and other similar Government initiatives that there is an increasing requirement for companies to:

  • Increase their knowledge and understanding of employment legislation to stay ahead of the game and to ensure they know more than their employees!
  • Put in place new policies and processes to remain compliant and reduce risks which in turn increases the administration burden and the cost base
  • Communicate more effectively with their employees

What do you think?

Are you a small or medium sized business worrying about how you will cope with these changes, keep your costs in check and continue to engage and motivate your staff?

By Fiona Cowie, Essential HR Solutions

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