While Coronavirus dominates the headlines, several non-related changes were announced in the Budget 2020 last week that will prove key for many employers.

Neonatal leave and pay

The government announced that it will create a new neonatal leave and pay entitlement for working parents, benefiting employees whose babies spend more than a week in neonatal care straight after birth, up to a maximum of 12 weeks.

Anne Pritam, Partner at law firm Stephenson Harwood says:

“The full details of the scheme are yet to be announced but it’s likely that the eligibility criteria will match normal statutory maternity and paternity pay criteria and that the rate of pay will match the base statutory maternity pay rate.

“Employees will be able to add this neonatal leave onto the end of their maternity/paternity/adoption leave, meaning that fathers and partners with babies in neonatal care will be entitled to far longer leave periods after the birth in addition to the usual two week paternity leave.”

Carers’ leave entitlement

The government will shortly consult on the design of carers’ leave, namely an in-work entitlement for employees with unpaid caring responsibilities, such as for a family member or dependant. This will support employees that need to balance caring responsibilities with work.

Raise in National Living Wage

The UK government plans to raise the National Living Wage to £10.50, or two-thirds of median earnings, by 2024. For this year, Chancellor of the Exchequer Rishi Sunak announced an increase of 6.2%, to £8.72 per hour, taking effect from April.

Sunak also stated that the National Living Wage will be extended to workers aged 21 and over by 2024.

National Insurance threshold to rise

The Chancellor of the Exchequer announced that the National Insurance primary threshold for employees will increase to £9,500 from April 2020.

The government projects that this will affect approximately 31 million people, saving a typical employee around £104 in the 2020/21 tax year. This is a step towards meeting the government’s ambition to raise the threshold to £12,500.