Employment law reform: UK Government launches review of parental leave and pay

On 1 July 2025, the Government announced that it would be conducting a full review of parental leave and pay, which includes maternity and paternity leave; parental leave; shared parental leave; adoption leave and others. Such a review could see an overhaul of these statutory forms of leave being “fairer and easier to use”. The Government has confirmed that the review will look at how to modernise parental leave to support today’s families and help grow the economy, ensuring that the system works better for parents and employers.

Only recently, the Women and Equalities Committee (WEC) had been campaigning for paternity leave to be extended to 6 weeks at 90% pay, whilst extending such provisions to self-employed and non-employed working fathers and had called on the UK Government to implement such measures. It is a welcomed and positive step that reform is being considered in the UK’s parental leave system, where some areas have not been updated in many years.

The current framework

Currently, the UK system is complicated with statutory entitlements lagging behind other Western countries. The existing entitlements are:

• Maternity leave and pay
• Paternity leave and pay
• Adoption leave and pay
• Shared parental leave and pay
• Parental bereavement leave and pay
• Parental leave (unpaid)
• Neonatal care leave and pay
• Maternity Allowance.

In addition to this, bereaved partner’s paternity leave (unpaid) is in development and the Government aims to bring the entitlement into force in 2026.

Statutory paternity leave is 2 weeks and one in three new fathers do not take paternity leave because they cannot afford to. Statutory maternity leave is 52 weeks long, however Statutory Maternity Pay (SMP) is payable for up to 39 weeks (which means 13 weeks are unpaid), in which the first 6 weeks of maternity leave is paid at 90% of an employee’s average weekly earnings, followed by a fixed rate or 90% of an employee’s average weekly pay, whichever is less, for the remaining 33 weeks. Currently, the fixed weekly rate is set as £187.18. Similar frameworks apply to statutory adoption leave. Various campaign groups have also sought that statutory pay should be increased to at least the national minimum wage level.

Although shared parental leave was introduced in 2015 with the purpose of giving working parents more flexibility with taking leave in their child’s first year of birth, there has been low rates of uptake of this scheme in which the complexities of this, along with the limited type of eligible workers, has attracted widespread criticism of the scheme. It has also been commented that the low level of statutory pay provides little incentive for fathers to take off work to share the burden of childcare.

Reform: how will the parental leave system be improved?

All current and upcoming parental leave and pay entitlements will be in scope of the review. The Government has acknowledged the current system is “complicated and doesn’t always give families the support they need”. The arrival of a child is a joyful time, however such arrival comes with physical and emotional demands. Improvements to the current system are therefore needed to help mothers rest and recover from birth and for both parents to bond with their children. The Government has noted that research has shown that better parental leave can help close the gender pay gap and boost the economy.

There are already some changes to parental leave underway which will be delivered in the Employment Rights Bill:

• Making paternity leave a ‘day one’ right
• Making unpaid parental leave a ‘day one’ right
• Enabling paternity leave and pay to be taken after shared parental leave and pay
• Enhancing dismissal protections for pregnant women and new mothers
• Strengthening the existing ‘day one’ right to request flexible working

The Government has compiled terms of reference to better understand where reform is needed in which the main objectives focus on maternal health; economic growth through labour market participation; best start in life; and childcare. In all areas of its review, it will be focusing on the following aspects:

• Fairness and equality – building a fairer system, between parents within a family, different type of parents and different employment statuses.
• Cost – balancing costs and benefits to both businesses and the exchequer and considering how the system can support economic opportunities for businesses and families.
• Social – improving our society, for example in supporting the child poverty strategy, and shifting social and gender norms including around paternal childcare.

Timeframes of the review

Where the review was launched on 1 July, the Government anticipates this review to run for a period of 18 months. The Government has mentioned that it will conclude the review with a set of findings and a roadmap, including next steps for taking any potential reforms forward to implementation.

The Government has said that it is determined for this to be an evidence-based review that reflects and considers the views and perspectives from a wide range of people who engage with the parental leave and pay system. We therefore anticipate consultations to be set up with a wide range of stakeholders.

Such changes in the parental leave system could mark a turning point in the UK’s employment rights and empower more families to build stronger bonds with their children without additional worries regarding eligibility to leave and financial consequences. It could indeed bridge the gender pay gap and challenge societal norms and stereotypes regarding parenting.

Our employment team will be monitoring any changes in this area over the coming months and will keep you updated on these. In the meantime, if you have any questions or concerns with your family-friendly rights, or believe a review of your family-friendly policies and procedures are needed, please do not hesitate to get in touch with our employment lawyers.