Last month, the TUC alleged that the rate of UK statutory maternity pay (“SMP”) was the worst in Europe and called for it to be “decently” paid.
How much is SMP?
SMP is paid over 39 weeks. The rate is:
90% of the woman’s weekly pay for the first 6 weeks of maternity leave; and
£140.98 (this tax year) for the remaining 33 weeks (or 90% of pay, if lower).
Are all employees entitled to SMP?
A woman will be entitled to SMP if she:
earns above the lower earnings limit (£113 for the 2017/2018 tax year);
has been employed for at least 26 weeks by the end of the Qualifying Week (which is the 15th week before the expected week of childbirth (“EWC”) (put simply if she becomes pregnant after starting work for you);
is still pregnant (or has given birth) 11 weeks before the EWC;
has given 28 days’ notice of the date she intends SMP to start (if reasonably practicable to do so); and has stopped work.
Are women on maternity leave entitled to anything else?
From a statutory point of view, women continue to be entitled to all their terms and conditions during maternity leave, other than those that relate to remuneration (wages or salary). Therefore, entitlement to holiday accrual, the use of a company car (if personal use is permitted) and any other non-cash benefits continues.
Women are only entitled to more maternity pay if the contract provides for this. You should:
consider the benefits of paying contractual maternity pay (potentially increased loyalty and a higher likelihood of the employee returning to work so skills are retained and recruitment costs saved);
consider what is affordable and whether there is a usual or standard rate for your business; and
include a repayment clause in the event that the woman does not return to work for, say, at least 6 months.