By Sue Tumelty on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs
Managing maternity pay and parental leave can be tricky for a busy employer.
There’s much to consider – the legal rights of the employee to leave and pay, alongside the wider needs of the business.
We thought it might be helpful to offer a succinct summary of the myriad issues, not only around maternity rights but also the different types of parental leave.
>See also: Dismissing staff on long term sick leave
Maternity rights
New and expectant mothers should request maternity leave in writing at least 15 weeks before their due date, having provided a MAT B1 form after 20 weeks as confirmation of pregnancy and the due date.
Many employees want to work as long as possible before the birth, using accrued holiday before starting maternity leave. So do discuss this with them.
Regardless of how long they’ve been employed, employees are entitled to up to 52 weeks of leave – 26 of ordinary leave, 26 of additional leave – which can start 11 weeks before their baby’s due date. All their contractual rights, including pay rises and holiday accrual, are protected during this period.
Note that maternity leave is different to maternity pay, which we will explain further in the next section.
The employee has the right to return to their job after the period of ordinary leave. Once they move into additional leave, if this isn’t practical then you must offer a role on their return which has similar status, salary, terms and expectations.
Employees with 26 weeks service before the 15th week and who earn £120 or more a week are entitled to statutory maternity pay or if not maternity allowance for the first 26 and the first 13 weeks of additional leave. However the remaining 13 weeks is unpaid unless their contract states otherwise.
If they don’t request it beforehand, the maternity leave starts automatically on the birth date. The new mother must take two weeks off after giving birth, or four weeks if they work in a factory.
Workers, such as agency workers, casual workers and those on zero hours contracts are not entitled to maternity leave.
Your employee will still be entitled to statutory maternity leave in case of premature birth, stillbirth after 24 weeks of pregnancy, or if the baby dies after birth.
Then there is the “sickness trigger”, which sees leave beginning immediately if there is a pregnancy related illness in the four weeks before the due date.
>See also: How do bank holidays affect statutory sick pay?
Payment and leave obligations for employers
Most statutory maternity pay can be claimed back from HMRC – 92 per cent in normal situations, up to 103 per cent if, having paid less than £45,000 in Class 1 NICs, you are eligible for Small Employers’ Relief.
Payroll software will help with this, and those companies with under 10 employees can use HMRC’s basic PAYE tools.
On pay, statutory maternity pay (SMP) is for employees up to 39 weeks of maternity leave. To qualify, employees must: earn at least £120 per week; give sufficient notice; provide the MAT B1 as proof of pregnancy; and have worked for you for at least 26 weeks by the 15th week before the due date.
How much is SMP? For the first six weeks, it’s 90 per cent of your employee’s pre-tax average weekly earnings – earnings including bonuses and commission, not just salary. Thereafter, it’s whichever is lower out of £151.97 or 90 per cent of their average weekly earnings.
These payments are payable even if you stop trading.
Enhanced maternity leave is an optional benefit that some employers make available to their staff. Family-friendly policies are known to increase staff retention through promoting good work-life balance.
Other types of parental leave
A biological father, the partner or the spouse of the mother, who has worked with you for more than 26 weeks and who will be helping bring up the child, can take up to two weeks of paternity leave, starting after the birth and ending within 56 days of it.
Rights to return are the same as with maternity leave. Much like with enhanced maternity leave, employers can also choose to offer enhanced paternity leave, as a means of attracting and retaining employees.
Unpaid parental leave is an entitlement, for 18 weeks of leave per child up to their 18th birthday. It must be taken in whole weeks and is limited to four weeks per year, with 21 days of notice given. Employees that are parents and have worked for you for more than a year are eligible. If the child is disabled the way leave is taken can be more flexible,
Shared parental leave rules provide up to 50 weeks of leave and up to 37 weeks of statutory shared parental pay, for the first year after the child’s birth. The eligibility and payment are basically the same as the period following the first six weeks of statutory maternity pay. This is a complicated process and needs plenty of planning ahead of the event.
Other considerations
Employees can work up to 10 paid “keeping in touch” days throughout their maternity leave – it’s not compulsory to offer them, and it’s up to you how much to pay, as long as it’s over national minimum wage.
These can be useful to support a new parent back into work and may provide good opportunities for ongoing training, as well as for your obligations to tell employees about promotion opportunities and any restructuring to your organisation by which they could be affected.
Summary and our thoughts
So there’s quite a bit to consider for business owners, aside from all the technicalities over the legislation, which is complex and variable.
Many business owners’ main concerns will be how to manage issues over pregnancy and leave, while keeping the company working to maximum efficiency.
In order to protect your business, you are entitled to ask for proof of pregnancy, attendance at antenatal clinics and for eligibility to, for example, paternity leave.
In general, our advice on this would be to strike the balance between sensitivity to the needs of the future and new parents, while helping them understand that you have a business to run. By giving the employees the opportunity to discuss their intentions you will be in a better place to manage the process. You cannot ask them if they intend to return to work, though you must assume they will. If they decide not to return, they must give you their contractual notice before the end of the leave. However, small business owners should also tread the line between rigour and pressure, and bear in mind the negative impact that over-reach can have on the future of your business.
Employees want to feel valued and looked after, especially around a major event like the birth of their child. Pregnancy, birth and the first few weeks and months of a baby’s life can be an incredibly emotional and challenging time for everyone involved.
As ever, communication is key to producing outcomes which strike the optimal balance for all parties.
Sue Temelty is founder and executive director of The HR Dept
Further reading
Flexible working from day one – what it means for SMEs
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Sue Tumelty, Khareem Sudlow
