Shared Parental Leave: The Technological Implications

With the new right to Shared Parental Leave fast approaching, now is the time to prepare, according to Andrew Chamberlain, Partner and National Head of the Employment team at legal practice DWF, and Heather Vitty, Client Services Director at HR and payroll software specialist Cascade. But it is also important to consider the technological implications of this new development.

To what extent can a system encourage a non-discriminatory approach, employee satisfaction and ultimately compliance, whilst minimising the administrative burden and resulting disruption imposed on an organisation?

With so much controversy in recent months surrounding the calculation of holiday pay, it is perhaps no surprise that this topic has dominated the UK’s HR and payroll headlines. Industry professionals have kept a keen eye on the outcomes of unfolding case law, eager to understand the financial implications of the newfound rulings, and ensure compliance.

As a result the impending right to Shared Parental Leave (SPL) has seemingly crept up on some organisations sooner than they’d anticipated. Admittedly many people feel the uptake of SPL will in fact be slow. However, the time for businesses to give it some serious thought is now. It is important to harness an understanding of what the legislation entails, what the possible impact will be upon employers and employees, and how SPL will be tackled in practice, by HR, payroll and line managers.

As with any development in this arena preparation is key, as is the need to devise robust, efficient, ‘best practice’ processes which will underpin an employer’s approach moving forward. The role of technology should not therefore be underestimated.

Have we been here before?

If we cast our minds back to when the pensions reform was first announced, we probably recollect a comparable mist of uncertainty. Whilst the overall benefits of auto enrolment were widely appreciated, the inherent complexity of the new obligations raised concerns amongst employers, as did the potential administrative burden that loomed. Reputable software vendors therefore worked hard to develop technology that would support HR and payroll teams with the adjustments they needed to make.

The focus was largely the formation of best practice processes that would ensure the right tasks were carried out by the right people, at the right time. This would safeguard compliance whilst minimising the likelihood of professionals being pulled away from the core elements of their roles – proficiently looking after and remunerating staff. Fast forward to the preparatory SPL phase we currently find ourselves in, and the environment is not too dissimilar.

Getting to know the ins and outs of SPL

Employment lawyers are busy dissecting SPL rights with clients who’ve quite rightly approached them for professional legal advice. Under the new regime, an eligible employee whose baby is due on or after 5 April 2015 has the right to end her maternity leave early (after her two week’s compulsory leave), and share the balance of her maternity leave (up to a maximum of 50 weeks), with her eligible partner.

On the face of it, this isn’t particularly difficult to digest. However there is, perhaps unsurprisingly, more to it and some key areas of concern for employers.

• Administration – Understanding the eligibility requirements surrounding SPL and Shared Parental Pay (ShPP) can be difficult. Because being eligible for SPL doesn’t automatically equate to being eligible for ShPP, employers are asking “What exactly are the eligibility requirements?” Another common question is “What records should we keep?”;

• Managing the flexibility of SPL – The flexibility of SPL means that parents can come up with seemingly complex arrangements to suit their needs. Employers cannot refuse requests for continuous leave but granting discontinuous leave is at the employer’s discretion;

• Managing ShPP – There is currently a great deal of legal debate surrounding the obligation, if any, to pay enhanced ShPP where there is an enhanced maternity pay scheme in place.

It is therefore important that businesses dig a little deeper to understand the ‘ins and outs’ of SPL, before they think about their approach to accommodate it*.

Armed with greater knowledge, organisations can then begin to consider how they will tackle the processes associated with SPL – which is where intuitive technology steps in.

HR and payroll software – not just a databank

For years some businesses have considered HR and payroll software platforms merely electronic filing cabinets; databanks that simply store employee information. Of course there are certain systems for which this description would be fair, but it should be acknowledged that dynamic, intuitive and flexible technology solutions also exist. These can act as valuable business management tools, especially during periods of change. They will therefore prove particularly helpful for businesses faced with the advent of new legislation such as SPL rights. The tools will help manage time consuming administrative tasks that would otherwise prove very costly, as well as ensuring effective communication amongst all involved

So, once employment advisers have supported clients by preparing a Shared Parental Leave policy – along with other key supporting forms and guidance – such documents should be stored centrally and made easily available for all. The self-service element of an employer’s HR software system is an obvious aide here. It offers easy access to important resources, which both managers and prospective parents may require. Self-service will also help employees review elements such as their continuity of employment and historic average earnings (if online payslips are available), making it even easier for them to assess their own SPL eligibility.

Once eligibility is known, workflows – carefully pre-configured processes or authorisation routes within a HR and payroll software system – will also prove valuable. They can guide an employee through the SPL request process, whilst supporting line managers who need to be equally ‘clued up’ on what to expect. The more informed everyone is the less HR and payroll teams will be distracted from their jobs, responding to SPL queries they should already have provided the answers to.

Some technology providers will have gone so far as to build screens within their system. A ‘notice of intention’ screen (or similar), will allow a prospective parent to inform their line manager of their due date and partner’s details, in case they wish to take SPL. This screen could also facilitate the submission of an eligibility declaration. A workflow may then be triggered which maps out the necessary next-step actions, such as ‘book a meeting with line manager’.

A second ‘booking notice’ screen (or similar), will allow employees to present their notice of entitlement, which must state the number of weeks’ maternity leave taken; the number of SPL weeks available; how much SPL the employee intends to take; and an indication of when. Very much like a holiday request process, the line manager will then be alerted. Validation rules will work behind the scenes to track an employees’ utilisation of requests for up to three blocks of continuous leave. This helps the manager determine if the request is legitimate – if so they must just acknowledge receipt. It will also show the employee the status of their remaining SPL entitlement.

At all times the employee can monitor what stage they’ve reached in the SPL process using the software. Forms, communications and meeting notes can also be recorded and accessed for utmost transparency. To a certain extent, the software can be used as an engagement tool in this respect – it keeps everyone in the loop, and prompts people to talk to one another when they need to.

Discontinuous leave – it can be refused

If an employee requests a period of broken or discontinuous leave, for example one week on one week off, the employer has the right to refuse this – it could cause great operational disruption, after all, especially for smaller businesses with limited resources.

A company’s stance on discontinuous leave should be clearly stated in their SPL policy, and communicated from the outset. Most employers are likely to only allow employees to take their three blocks of continuous leave. Employers considering discontinuous leave requests should document their reasons why leave is or isn’t granted. That way, there is an audit trail should it ever be required in order to refute claims of discrimination.

In terms of assessing the operational feasibility of a discontinuous leave request, managers can draw upon the insight of HR software once more. They can access team planners for instance to analyse the extent to which colleagues could cope if the parent was absent for broken periods of time.

Statutory vs enhanced pay

Assuming the periods of leave are finalised, there is then the question of pay. If organisations can afford to remunerate all parents with enhanced pay, then of course this would be very well received by employees. But this is not necessarily financially feasible for all employers.

At the time of writing, the Department for Business, Innovation and Skills (BIS) guidance says that organisations don’t have to pay enhanced ShPP to employees, even if they currently offer enhanced maternity pay for mothers. However the lawfulness of different pay under different schemes is the topic of great legal debate, at present. The risks of discrimination may only be theoretical for now, but they are risks nonetheless. Prudent employers should therefore review their maternity pay policies and speak to their legal advisers to determine what is the best course of action for their organisation – this isn’t a one size fits all situation.

Over to payroll

Regardless of when the parent takes their SPL and what level of ShPP an employer decides to offer, the accurate and timely remuneration of staff is very important. Payroll software must be more robust than ever to cope with the variable elements that come with this new legislation. If there are any doubts as to the integrity of an organisation’s existing system, or payroll bureau service, now is the time to review it.

The argument for a fully-integrated HR and payroll solution has perhaps never been stronger. At the very least there should be a more closely aligned working relationship between the two departments. The seamless flow of precise information is paramount, to ensure compliance and to meet employees’ needs. Plus, with the introduction of additional and unfamiliar business processes, employers should be striving to reduce the duplication of data entry and the creation of unnecessary administrative work.

When Human Resources and payroll functionality lies within the same system, an individual’s hours and pay entitlement can be extracted from HR and their pay calculated automatically. The information can be fed through to the payroll team with one or two simple clicks, and the necessary funds deposited when due.

Adopting a proactive stance

The increasing importance of technology is hopefully becoming apparent. But software does not just offer help in relation to the efficient management of administrative processes. It can encourage organisational proactivity too.

For example, it can prompt a line manager to consider the potential operational impact of parental leave, whether it is a father or mother who will be absent from work. By running ‘what if’ queries through the HR software – a function that more intuitive systems include as standard – managers can conduct competency-based employee analysis. This helps to identify if there is a need to recruit temporary staff or pull employees from different departments. If there is, workflows can then guide the manager through what to do next. Without this functionality succession planning may otherwise be difficult.

Remembering why SPL is important

Ultimately, SPL provides parents with a significant opportunity to manage their childcare in a way that most benefits their family situation. It is a reflection of modern society and avoids the need to adopt stereotypical ‘breadwinner vs stay at home’ parental patterns, which don’t apply to every household. The flexibility that SPL presents – the chance for parents to choose the work-life balance that best suits them and their children – is vast and organisations should not lose sight of this.

Whilst SPL may create the need for procedural changes and cultural mindsets may also require some adjustment, by supporting mothers and fathers in their work and home life, employers can communicate a key message – that employees are valued. Their talents and skills are important, as is their development and retention.

Choose your strategy carefully

An organisation’s approach to SPL should therefore be carefully considered, as the strategy adopted will speak volumes about the employer. The time to act is now – potentially the last chance for any ‘breathing space’ or ‘thinking time’. Whilst the uptake is likely to be gradual, it cannot be forgotten that employees who could be eligible are already pregnant. If they haven’t already asked, they’ll want to know what SPL means to them, whether they’re eligible and how they can go about arranging shared leave.

*DWF’s Shared Parental Leave hub provides visitors with a library of free SPL information and resources to consider: http://employment.law-ondemand.com/shared-parental-leave/.

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