What is Occupational Maternity Pay?

blog-publish-date

14 Jun 2018

blog-read-duration

What is Occupational Maternity Pay?

Occupational maternity pay is an optional payment that you can make as an employer. You pay it on top of the Statutory Maternity Pay that you can pay your staff while they're on maternity leave. When one of your staff goes on maternity leave, you must pay them Statutory Maternity Pay (SMP). You probably knew that. There is a minimum amount of SMP you must pay your staff each month. And you pay it just like you would their salary—so yes, tax and National Insurance deductions still apply. But did you know that you could enhance the amount you're paying to your new parent employees? Well, with occupational maternity pay (OMP), you can do just that. You might know it instead as contractual maternity pay or enhanced maternity pay.

Occupational Maternity Pay Entitlement

If you're going to offer occupational maternity pay, make sure you include the terms of your scheme in staff contracts. You could also include the terms in your employee handbook. That way, your staff can read up on the scheme whenever they like. The terms will also serve you as a reference document if you ever need to respond to a query or dispute. Conditions you could put in your occupational maternity pay entitlement scheme include:

  • Staff must return to work for you once their maternity leave ends
  • A length of service—e.g. one year of service before they're eligible for occupational maternity pay
  • If the employee on maternity doesn't return to work, they must repay all or part of (be clear on the figure) the occupational maternity pay

This list isn't exhaustive.

How Much Occupational Maternity Pay Should You Pay?

Remember, you're enhancing an employee's SMP. So, logically, paying OMP requires you to add money on top of their SMP, creating a larger payment. SMP over 39 weeks looks like this:

  • The first six weeks: 90% of your employee's average weekly earnings before tax
  • The next 33 weeks: £145.18 per week, or 90% of your employee's average weekly earnings (whichever is lower)

Use Croner's free maternity pay calculator to work out SMP for you or your staff. You might only give an additional £10 per week in occupational maternity pay. Or you might do something like this:

  • The first 12 weeks: full pay (but remember, that's in addition to SMP)
  • The next eight weeks: half pay (and again, in addition to SMP).
  • The remaining 19 weeks: just Statutory Maternity Pay.

If you're feeling even more generous, you could include a return-to-work bonus for your staff as an added incentive to make sure they come back.

Should you give your staff occupational maternity pay?

There's not a clear-cut 'yes' or 'no' for this. It comes down to what you think is best for your business. If the added cost would hurt the business, then don't do it. OMP is optional. One benefit is that your staff are likely to show gratitude towards your generosity when they return to work by being loyal and productive. Your staff retention numbers could increase. Your new parent employees will speak highly of you and your business, too. A good reputation can go a long way when you're looking to hire new talent.

Speak to an Expert

Croner offers expert advice about all things employment law, HR, health & safety, reward, and more. If you have a question about SMP, or OMP, or anything else related to maternity pay, contact us on 0808 145 3375.

Free to Download Employer Resources

  • Pay Awards & Forecast (September 2018)

    FREE DOWNLOAD

    Pay Awards & Forecast (September 2018...

    Read Croner Reward's expert settlement and forecast report for September 2018

    Read more
  • Sample Health & Safety Policy Statement

    FREE DOWNLOAD

    Sample Health & Safety Policy Stateme...

    Here we’ve included a free sample Health & Safety Policy Statement that UK business owners can refer to.

    Read more
  • Pay Awards & Forecast (June 2018)

    FREE DOWNLOAD

    Pay Awards & Forecast (June 2018)

    Read Croner Reward's expert Settlements and Forecasts report for June 2018

    Read more
  • Tribunal Claims Continue to Rocket

    BLOG

    Tribunal Claims Continue to Rocket

    Here is a comparison of tribunal cases for the three months of April to June 201...

    Read more
  • National Minimum Wage Report Findings

    BLOG

    National Minimum Wage Report Findings

    In September 2018, the government released a report on the National LivingWage (...

    Read more
  • Staff Turnover: What Do You Need to Know?

    BLOG

    Staff Turnover: What Do You Need to K...

    Having a high worker turnover can have mean two things: A negative impact on you...

    Read more
  • bemrose-school-derby

    CASE STUDY

    Bemrose School Derby

    “Having Croner-i saves us a lot of time and money, as we do not have to use cred

    Read more
  • wmtr

    CASE STUDY

    WMTR

    “I’d definitely recommend the Croner OnSite services and I have done already, I

    Read more
  • certikin

    CASE STUDY

    Certikin

    “Our Distribution Manager had a particularly technical query relating to respira

    Read more

Ready to focus on what you do best?

Get your free consultation and speak to an expert today.