Maternity Pay Increases

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07 Dec 2016

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The government has announced that many statutory pay rates will be increasing from April 2017.

Employers must be mindful of these increases, which includes maternity, paternity, shared parental, adoption and sick pay. The increase normally occurs on the first Sunday in April, which would mean that the change will come into effect on 2 April 2017 next year. Currently, the weekly rate of maternity statutory pay is £139.58, or 90% of the employee’s average earnings if this figure is less. As of April 2017, the maternity pay rate will rise to £140.98. Alongside the National Living Wage increase and the apprenticeship levy, the £1.40 rise in maternity pay will contribute to a number of changes due to come into effect in April. With this in mind, we have compiled two examples of queries surrounding maternity pay which have been answered by our experts.

Question One

Q: We have an employee who is taking her full entitlement to 52 weeks of maternity leave and is due to return to work in two months. She has mentioned to colleagues that she may not return to work.  I presume that if this is the case then she will need to resign giving her contractual notice of one month?  If that is the case then what payment is due to her during the notice period?  We do not pay occupational maternity pay in that period and her statutory maternity pay has already been exhausted. A: You are correct that your employee would have to resign in the normal way by giving one month’s notice, as per her contract of employment. Clearly, if she does not wish to return to work then she will need to provide you with her notice at least one month before the anticipated end of her maternity leave and she would then remain on maternity leave throughout the period of her notice. Strangely, although she would be resigning, her entitlement to pay during the notice period is dependent on how the notice that you would be contractually obliged to issue on dismissal compares with the statutory minimum notice entitlement. If the contractual notice on dismissal is at least one week greater than her statutory notice (1 weeks’ notice for each complete year of service, to a maximum of 12 weeks) then the employee will not be entitled to any payment for the notice period.  If however the contractual notice on dismissal is less than one week greater than statutory notice then the employee would be entitled to one week of full pay.  This would be due for the final week of the one month notice given by her. In addition, your employee would also be due payment for any holiday (and Bank Holiday) entitlement that she has accrued and been unable to take for the duration of her maternity leave (and before, if this is applicable) even if her maternity leave straddles two annual leave years, to avoid any allegations of sex discrimination being made.

Question Two

Q: We have a pregnant employee who has resigned and is leaving in three months. The qualifying week for assessing her entitlement to Statutory Maternity Pay (SMP) falls the week before she is due to finish and she understands that she is leaving too soon to begin her maternity leave with us.  I understand that she may still be entitled to SMP payments from us if she meets the criteria as normal.  Her contract of employment also provides for enhanced maternity pay.  Would she be entitled to this as well? A: Although your employee would be entitled to SMP if she has qualified in the normal way she may not also be entitled to your enhanced maternity pay, this being dependent on your internal qualifying criteria. As a consequence of her resignation she will no longer be employed by you during the period in which the maternity leave could have been taken and the contract of employment will no longer be in operation.  If this is the term on which occupational maternity pay is made, then she would not be entitled to any enhanced payment; however if your qualifying criteria for occupational pay mirror that of qualifying for statutory maternity pay – then you would still have to make payment of this to her.

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