McGuireWoods London managing partner Dan Peyton was quoted in an April 23, 2020, People Management article on shared parental leave in the United Kingdom, analyzing the economics issues for couples and logistics issues for smaller employers.
“The economics of shared parental leave does little to incentivize take-up,” said Peyton, a labor and employment partner. “A lot of mothers who are employees will be entitled to enhanced maternity pay in addition to statutory payments. A father typically receives just two weeks’ paternity pay and shared parental pay stretches over a 37-week period, whereas statutory maternity pay is paid for up to 39 weeks.
“So to make shared leave financially viable, a couple would need both to have six months fully paid parental leave entitlements to ensure that their household income remains the same. In most cases, it makes little financial sense to share leave. Even if parents take advantage of shared leave, notwithstanding the drawbacks, it’s unlikely take-up will be repeated for a second child or a third.”
Commenting on logistics from the employer’s standpoint, Peyton noted, “For smaller employers with less resources, these offerings are not going to be as possible. The professional services industry, for example, and the larger accountancy practices are well placed to offer such leave. Whereas smaller businesses operating in, for example, entertainment or catering will not be able to.”