Parental leave revolution: What employers need to know

The Government has announced a detailed review of the parental leave system, representing the first thorough overhaul of family leave policies in decades. This landmark review could fundamentally reshape how employers support working parents, and we are here to help you understand what it means for your organisation.

Understanding the review

This isn’t just a minor policy tweak. The Government is looking at the entire parental leave landscape – from maternity and paternity leave through to shared parental leave – to create a system that works better for everyone. This review sits within the Government’s wider Plan to Make Work Pay, by which the Government aims to drive economic growth alongside better living standards for working families.

The changes ahead could significantly impact Employers’ workforce policies and wider planning, so it is crucial to start preparing now.

Why this review matters

The current parental leave system simply is not working as well as it should:

Low uptake rates are telling a story:

Financial pressures are said to prevent one in three fathers from taking paternity leave, and shared parental leave uptake remains low. These statistics reveal a system that is failing to serve families.

The economic case is compelling:

Evidence suggests that stronger parental leave policies could have an impact I on gender pay gaps, whilst boosting the UK economy. For employers, this may translate to better talent retention, reduced recruitment costs, and improved workplace equality.

Complexity creates problems:

The current system is considered by some commentators to be overly complex, burdening employers with unnecessary administration and leaving employees struggling to understand their entitlements.

What is being reviewed

The Government is looking at:

• Maternity leave: provides up to 52 weeks of leave, however the earnings drop substantially after the initial six weeks.
• Paternity leave: Limited to two weeks.
• Shared parental leave: Designed to offer flexibility, yet participation remains low.

• Statutory pay levels: Whether current payment levels adequately support families through this crucial period

What this means for your business

Immediate steps to take

While the review is still underway, employers are encouraged to begin preparations:

Review your current policies:

Take a fresh look at your existing parental leave policies and procedures. Are they clear, accessible, and competitive?

Assess the financial landscape:

Think about the potential impact of improvements to statutory pay on your organisational planning.

Think about workforce planning:

What impact could extended parental leave have on your staffing models and day-to-day operations?

Evaluate your support systems:

Are your current systems for supporting parents returning to work as effective as they could be?

Strategic considerations

Employers are already asking whether their current parental leave packages match where this review is likely to lead. Organisations that get ahead with enhanced family-friendly policies are said to consistently outperform competitors in attracting and keeping top talent.

The business case for better parental leave

This review acknowledges something we have long understood: supporting working parents is not just the right thing to do – it provides organisational advantages. Enhanced parental leave can:

• Boost employee retention and reduce recruitment expenses
• Enhance an organisation’s reputation.
• Support gender equality initiatives
• Promote a healthier work-life balance for employees across the organisation
• Decrease long-term absences and potentially increasing employee wellbeing and job satisfaction

What happens Next

The Government plans to consult parents, employers, and specialists nationwide before mapping out potential changes. Although exact timescales remain unclear, organisations should prepare for continued engagement throughout the review process.

This is your opportunity to have a voice in shaping future policy. We encourage businesses to engage with the consultation process and share their experiences of operating under the current system.

How to prepare for change

Stay current with your policies:

Assess your parental leave policies to ensure they align with current legislation and genuinely address the needs of your workforce

Keep informed:

Monitor the progress of the review and start preparing for any potential updates to statutory obligations.

Engage actively:

When opportunities to contribute occur, make sure your business voice is part of the conversation.

Plan strategically:

Begin evaluating how potential changes could impact your organisation’s operations and financial planning.

Expert support when you need it

As the landscape shifts, organisations will need skilled legal support to understand what it all means for them.

At Brachers, our Employment Law team keeps a close eye on legislations, making sure our clients stay one step ahead of workforce changes. We provide practical, commercially-focused advice that helps organisations policies while managing their legal risks effectively.

Whether you are reassessing your parental leave policies, preparing for upcoming legislative changes, or addressing specific employment law challenges, our experienced team is here to help. We recognise that changes in employment law can carry significant operational and financial consequences, which is why we work closely with clients to craft strategies that align with business goals while supporting employee wellbeing.

How can we help?

Our employment law team can review current arrangements and proposed changes and help you plan for adjustments, if you would like assistance, please get in touch. If you require HR support our HR consultancy partners, Kent HR can assist you

For more in-depth guidance or support on The Employment Rights Bill, book a free 30-minute consultation with a member of our Employment team today.

Our employment law update 2025 provides regular updates further employment law changes. To keep up to date with employment law changes, sign up to receive regular business updates along with industry specific updates for the healthcare and education industries.

This content is correct at time of publication