The UK government has launched what it describes as a landmark review of parental leave and pay, marking the most comprehensive examination of family-friendly employment rights in over a decade. The review launched on 1 July 2025 and is expected to run for 18 months until the end of 2026, following which the Government will set a ‘roadmap’ for further reforms to the parental leave system.
For employers, this review signals potential significant changes to family leave obligations and presents an opportunity to influence future policy through the consultation process. The consultation can be accessed here and runs until 26 August 2025. The government has stated that it welcomes any contributions from employers.
Scope and Objectives of the Review
The review will gather views from parents, employers and experts across the country and will conclude with a set of findings and a roadmap for possible reforms.
The consultation will consider the following existing rights:
· Maternity Leave and Pay;
· Maternity Allowance;
· Paternity Leave and Pay;
· Shared Parental Leave (SPL);
· Adoption Leave and Pay;
· Neonatal Care Leave;
· Parental Bereavement Leave and Pay; and
· Parental Leave (unpaid).
The consultation is particularly significant as it represents the first comprehensive review since the introduction of Shared Parental Leave in 2015, which has faced criticism for low uptake rates and complex administrative requirements.
The review will also consider a new unpaid right: bereaved partner’s paternity leave, set out in the Paternity Leave (Bereavement) Act. This right was rushed through parliament prior to the July 2024 general election. It provides for new rights to bereaved fathers and partners where a child’s mother dies. It is not yet legally effective but the government plans to finalise this in 2026.
Key Areas Under Examination
Early indications suggest the review will examine several critical areas that directly impact employers:
Financial Incentives:
Consider introducing financial incentives to increase take up of SPL, such as additional paid leave to couples in which both parents take a substantial portion of leave. This could potentially increase employer costs and administrative burdens.
Extended Coverage:
A recent report by Parliament’s Women and Equalities Committee recently set out that paternity leave rules ‘entrench outdated gender stereotypes’. It also recommended that the government should increase paternity pay to 90% or more of pay, and paternity leave to six weeks.
Simplification:
The complex interaction between various leave types has been criticised by employers and employees alike, with calls for a more streamlined system.
Implications for Employers
The review presents both opportunities and challenges for employers:
Administrative Burden: Any expansion of entitlements will likely increase HR administrative requirements, particularly around eligibility assessments, payment calculations, and return-to-work planning.
Cost Implications: Enhanced pay rates or extended coverage could substantially impact workforce costs, particularly for smaller employers who cannot easily absorb extended absences.
Talent Retention: Conversely, improved parental leave provisions could enhance employer attractiveness and support retention of skilled employees, particularly women who traditionally bear the greater career impact of parenthood.
Planning Challenges: Extended or more flexible leave arrangements require sophisticated workforce planning, particularly in sectors with skills shortages or project-based work.
Strategic Recommendations for Employers
Engage Proactively:
Participate in the consultation to ensure employer perspectives are represented. Focus on practical implementation challenges and cost implications.
Review Current Policies:
Use this opportunity to assess existing family-friendly policies and identify areas for improvement that could provide competitive advantage.
Prepare for Change:
Begin scenario planning for potential changes, including enhanced statutory minimums and increased administrative requirements.
Monitor Developments:
Stay informed about the review’s progress and emerging recommendations to enable strategic workforce planning.
Please note the contents of this article do not constitute legal advice. If you require any further information or if you would like our assistance, please contact us at employment@berrysmith.com or on 02920 345 511.