Paternity leave – what are the rules?

limited company paternity leave

Since the Paternity Pay Act was introduced in 2003, new fathers in the UK have been entitled to apply for between one and two weeks’ time-off work, depending on how long they have been with an employer.

Typically, most fathers opt to take leave following the birth, to look after the baby or the mother. So how does paternity leave work exactly, what are the rules employees have to follow and how does this affect employers?

Statutory paternity leave

Statutory paternity leave is the time an employee can take off work to support their partner. To qualify, employees must be the biological father of the child or the mother’s husband or partner (this includes same sex relationships).

If your employee is the child’s adopter or, if using a surrogate, is the intended parent, they will also be eligible for paid paternity leave. Paternity leave cannot start before the birth of the child and should end within the first 56 days following the birth, or the due date in the case of the baby being born prematurely.

Contractors, freelancers or agency workers are not entitled to paternity leave or the right to return to the same job, but may qualify for statutory paternity pay.

Does it apply to all employees?

Before they can apply for paternity leave, an employee must have been on the company’s payroll for at least 26 continuous weeks by the end of the so-called ‘qualifying week’. This is by the end of the 15th week before the expected week of the baby’s birth and is the date by which they should request paternity leave, although this is different if the employee is adopting.

Employees should tell you when they want the leave to start and how much time off they require. If they’ve been employed for 26 weeks or more, they can apply for one or two weeks ordinary paternity leave.

As the employer, you can ask them to put their request in writing, or they can complete form SC3 (see below).

Some employers allow staff to take more time off, if so, this should be specified in the employment contract. In all cases, paternity leave can only be taken to look after the child or the partner.

What about pay?

To be eligible for paternity leave, employees must earn at least £113 a week gross per week. That being so, the statutory rate of pay to which they will be entitled is set at either £140.98 per week or 90% of their average weekly wage (whichever of the two is lowest), although this may be more depending on the terms of their contract. Statutory pay is paid by the employer who deducts tax and national insurance in the normal way.

What if the business can’t afford it?

If you want to offer your employee paternity leave but are concerned that it will hit the business financially, you may be able to claim back statutory paternity pay from the government. Depending on your situation, you may be able to off-set the payments against national insurance contributions, so the employee doesn’t lose out. Smaller businesses can also apply for a loan from HMRC to cover paternity pay.

Does paternity leave affect holiday rights?

Paternity leave can’t be regarded as annual leave and staff will continue to accrue holiday entitlement in the normal way and as part of their employment rights. They will also be entitled to receive any pay rises the company awards while they are off work.

Can I refuse to let an employee take paternity leave?

If the employee doesn’t qualify for paternity leave according to the eligibility criteria set out above, you can refuse to let them take it. You can refuse statutory paternity pay by completing form SPP (see below). If the employee is eligible for paternity leave, it would be unlawful for you to prevent them taking the time off, or to dismiss an employee for taking leave. In both instances, the employee could make a claim for compensation or for unfair dismissal.

What is shared parental leave?

Shared Parental Leave (SPL) was introduced in December 2014, a new right that replaced additional paternal leave entitlement in England, Scotland and Wales. As the name suggests, parents can now share leave following the birth or adoption of a child. If they meet the eligibility criteria, they can take up to 50 weeks off (37 of which is paid leave). Employees can take SPL in three separate blocks and can choose how much each parent will take.

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