Government Launches Review of Parental Leave and Pay – What businesses need to know

The UK Government has launched a long-awaited review into parental leave and pay, signalling potential changes that could reshape how employers support new and expectant parents in the workplace. This review will examine the existing statutory entitlements for maternity, paternity, shared parental leave (SPL), and unpaid parental leave, with a focus on improving flexibility and increasing take-up, especially of paternity and shared leave.

For businesses, this review could be an early warning of likely reforms ahead.  While no legislative changes have yet been confirmed, the Government is clearly concerned that current arrangements are not working as effectively as intended, particularly for fathers and partners.

What’s Being Reviewed?

Key areas under consideration include:

•   Whether statutory paternity leave should be extended or made more flexible;

•   How to simplify and encourage greater use of Shared Parental Leave (SPL);

•   Whether parental leave entitlements better reflect modern family life and working patterns;

•   Whether statutory pay rates are sufficient and equitable across types of leave.

The Government is expected to consult with employers, parents, and stakeholders throughout 2025, with potential reforms announced in 2026.

What Should Employers Be Doing Now?

While changes aren’t guaranteed, this review signals the likely direction of travel as the UK falls behind many other countries in Europe for parental leave and pay. Employers should consider:

•   Reviewing parental leave policies to ensure clarity and compliance;

•   Consider how your current provisions support (or discourage) fathers and partners taking leave;

•   Assess whether enhanced parental pay or more flexible arrangements could support recruitment and retention.

If reforms do follow, employers may need to update employment contracts, staff handbooks, and implement training to reflect the new entitlements and procedures and to encourage take up.

We are ready to support you in preparing for potential changes ahead.  We can audit your current parental leave policies and recommend improvements.

If you’d like to discuss how the parental leave review may affect your business or wish to get ahead with policy updates, please do get in touch.

Amanda Finn is a partner at Gullands Solicitors and can be contacted at a.finn@gullands.com