...Paid Maternity Leave
The two basic things you need to know about when your employees need time off to have kids are Maternity Leave and Maternity pay. For most UK employees, these are basic employment rights and you need to stick to the rules about them. Let’s break them down one at a time:
When an employee in your business is expecting a baby, their right to Maternity Leave kicks in. It doesn’t matter how long you’ve had them on your payroll, they’re still entitled to a full 52 weeks or Statutory Maternity Leave. They can start their leave on the 11th week before the child is due, at the earliest – but they don’t necessarily have to take the full amount. There are a few rules about the minimum they can take, though. 2 weeks after the birth is the basic minimum – unless they work in a factory, in which case they have to take at least 4 weeks off. If the baby comes early, their Maternity Leave will kick off on the day after the birth.
An important point to remember is that they’re still your employees while they’re on Maternity Leave. That means all the same rights and benefits they’re entitled to still apply. So, whatever they’re eligible for in terms of things like paid holiday, job security, pension payments and so on, those rules don’t change. The same goes for any benefits they normally get from their jobs, such as private medical insurance.
By law, assuming you get the correct notice and proof that there’s a baby on the way, you still have to pay your employees for at least part of the time they’re on Maternity Leave. This is assuming they’ve worked for you for at least 26 weeks before the “qualifying week” – meaning the 15th week before the baby’s due date. They also need to have average weekly earnings of at least £118 a week in what’s known as the “relevant period”. This sounds pretty complicated, but basically just means the 8 weeks before the qualifying week.
As for what you actually have to pay them, the numbers break down like this:
If you’re on the ball, you’ve have already spotted that this adds up to less than the full 52 weeks of Maternity Leave your employee can take. As it turns out, you only have to pay a minimum of 39 weeks of Maternity Pay – all handled through your standard PAYE procedures as normal.
So far, it sounds like you’re legally required to pay your employees to go off and create miniature humans. That’s only about half of the big picture, though. While you’ll have to figure out some way of covering for your missing employees during their Maternity Leave, you can usually claim back a massive slice of their Maternity Pay from the taxman. What you can get and how it all works depend on the size of your business. If you’re a smaller firm paying under £45,000 in Class 1 NICs, for instance, you can actually claim back more than you’re paying out: 103% of it, in fact. This is called Small Employers’ Relief. Bigger businesses are stuck claiming back only 92% of the Maternity Pay they’re shelling out, but that’s still an impressive chunk to get repaid.
Maternity Pay can obviously be a bit of a problem for some employers - those with limited cash flow, for instance. Again, though, HMRC steps in to help by letting them claim their repayments up to 4 weeks in advance.
That’s the basic lowdown on Statutory Maternity Leave and Pay. If you need more guidance or advice, get in touch with any questions you have – and keep listening out for more Voices from the RIFT…