Date of publication: March 2019
It is automatically unfair to dismiss an employee on pregnancy-related grounds. Where the employment ends because of genuine redundancy or because the woman's fixed-term contract has come to an end during the maternity leave period, the employee must be offered any suitable available vacancy.
A pregnant employee will qualify for SMP if she is an employee, not a ‘worker’ and if she gives the employer the correct notice. It does not matter how long you’ve been employed at the company, how much you are paid or how many hours you work. To qualify for SMP during maternity leave, an employee must, by the end of the 15th week before her baby is due, inform her employer of the date on which she intends to start her maternity leave. She must also provide her employer with a Certificate of Expected Confinement (Form MAT B1), signed by her doctor or midwife. The doctors or midwives will give you this no more than 20 weeks before the due date. If she later changes her mind about the date on which she plans to start her maternity leave (as she has every right to do) she must inform her employer of the revised start date at least 28 days before the date in question. The employer may ask for this request in writing. Also the employer must write to her within 28 days confirming her start and end dates.
Statutory maternity pay is treated as earnings and so is subject to deductions for tax and National Insurance contributions.
There are two rates of SMP, the higher rate and the lower rate. The higher rate is an amount equivalent to nine-tenths of the employee's average weekly earnings and is payable for each of the first six weeks of the maternity pay period. The lower rate, payable for the remaining 33 weeks, is currently £145.18 (£148.68 per week from 7 April 2019) or 90% of the employee's average weekly earnings, whichever is lower. The SMP rates are reviewed every April,
Once the 39 weeks of paid SMP have expired, the remaining Maternity leave is unpaid.
92% of the SMP paid to your employee by the company is reclaimable from HMRC. If you don't have sufficient payroll deductions available to cover the SMP you're entitled to recover, you may be able to apply for funding from HMRC.
If an employee works for the company for any week or part of a week during her Maternity Pay Period, SMP is not payable for the whole of the week in which work is done. The exception is that the employee may work for up to 10 “Keeping in Touch” (KIT) days, for which she is paid in full.
In the ordinary course of events, payments of SMP to an employee must stop at the end of the payment week immediately preceding the week in which she returns to work after childbirth. This rule applies even if she has not by then exhausted her full 39-week entitlement to SMP.
An employee who resigns or is dismissed (for whatever reason) during her maternity pay period must continue to be paid SMP until such time as that entitlement is exhausted, unless she takes up employment with another employer after giving birth, in which case payments of SMP must stop with the last weekly payment immediately preceding the week in which she started work with that other employer.
The employee will accrue holiday entitlement as if she were still at work.
An eligible employee will qualify for statutory paternity pay (SPP) during his or her absence from work on paternity leave if he or she has average weekly earnings equal to or greater than the current Lower Earnings Limit (£116 per week (£118 per week from 7 April 2019), before tax). Statutory paternity pay is currently payable at £145.18 per week (£148.68 per week from 7 April 2019) (for up to two weeks) or 90% of the employee's average weekly earnings at the time, whichever is the lower of those amounts. An eligible employee can take a maximum of 2 weeks paternity leave/pay, but can take only 1 if he or she chooses. 92% of SPP is reclaimable from HMRC.
The right to paternity leave/pay is not available if the eligible employee requests Shared Parental Leave instead (see below).
There is now the option of having shared parental leave, whereby an eligible mother and her partner take it in turns to use the remaining maternity leave ( 50 weeks minus any weeks of maternity leave) and the remaining SMP ( 37 weeks minus any weeks of maternity pay/maternity allowance) . Both employers must be in agreement regarding the dates of leave and there is a significant amount of HR and admin involved in order for this to be set up. 92% of Shared Parental Leave Pay is reclaimable from HMRC.
Disclaimer: This note does not contain a full statement of the law and it does not constitute legal advice. Please seek legal advice if you have any questions about the information set out above.
Copyright © 2013 - Oury Clark.