Maternity Leave Legality & Advice - Employers Guide

Maternity Pay in the UK

In the UK, employees are entitled to up to 52 weeks of maternity leave, split into Ordinary Maternity Leave (26 weeks) and Additional Maternity Leave (an extra 26 weeks). The first 26 weeks are mandatory if the employee chooses to take it, while the additional 26 weeks are optional. Statutory Maternity Pay (SMP) is the legal minimum that you, as an employer, must pay to eligible employees. To qualify for SMP, an employee must:

Have been working for you continuously for at least 26 weeks by the end of the “qualifying week” (the 15th week before the expected week of childbirth).

Earn at least £123 per week (as of 2024) before tax.

Provide you with sufficient notice and proof of pregnancy (usually a MATB1 form from their midwife or doctor).

How Long is Maternity Pay?

SMP is paid for up to 39 weeks, but maternity leave itself can last up to 52 weeks. The employee can choose to return to work after 39 weeks or take the full year off, with the final 13 weeks being unpaid unless your company offers enhanced maternity benefits. As mentioned, employees are entitled to 39 weeks of statutory maternity pay. Of these:

The first 6 weeks are paid at 90% of their average weekly earnings.

The following 33 weeks are paid at the lower of £172.48 or 90% of their AWE.

Can an Employee Work While on Maternity Leave?

Generally, employees cannot work while on maternity leave. However, Keeping in Touch (KIT) days allow employees to work for up to 10 days during their maternity leave without affecting their SMP. KIT days are voluntary and must be agreed upon between the employer and employee. They can be used for training, meetings, or other work-related activities.

Can You Terminate an Employee on Maternity Leave?

It is illegal to dismiss an employee solely because they are pregnant or on maternity leave. However, if there are valid reasons (e.g. redundancy) unrelated to their pregnancy, and you follow the correct procedures, termination may be possible. Any dismissal related to pregnancy or maternity leave is automatically considered unfair, and the employee could bring a claim against your company.

How to Work Out Maternity Pay

SMP is paid for up to 39 weeks. It consists of:

First 6 weeks: Paid at 90% of the employee’s average weekly earnings (AWE) before tax.

Next 33 weeks: Paid at either the SMP rate (£172.48 per week as of 2024) or 90% of their AWE (whichever is lower).

To calculate maternity pay:

Identify the qualifying week: This is the 15th week before the baby is due. You will use the employee’s earnings over an 8-week period ending with the last payday before this week.

Calculate average weekly earnings (AWE): Total the earnings during the 8-week period and divide by 8.

Apply the appropriate rates: Pay 90% of the AWE for the first 6 weeks and either the SMP rate or 90% of the AWE (whichever is lower) for the remaining 33 weeks.

Maternity Pay After Tax

Maternity pay is subject to tax and National Insurance contributions, just like normal earnings. If you want to estimate the amount an employee will take home, you can use a maternity pay after tax calculator, which will deduct tax, National Insurance, and any other deductions from the gross SMP.

Receive Notice Efficiently

PayEscape’s software allows employees to submit their maternity leave requests directly through a self-service portal. This ensures you receive notice in line with UK regulations, which require employees to inform you at least 15 weeks before their due date. The software keeps records of all communication, including the expected week of childbirth and the intended start date of maternity leave.

Confirm Leave and Pay Seamlessly

Once an employee provides the required information, including their MATB1 form, PayEscape’s payroll system automatically calculates their entitlement to Statutory Maternity Pay (SMP) and maternity leave. The software can generate letters or notifications confirming these details, ensuring compliance with UK employment law while saving time.

Simplify Risk Assessments

While PayEscape’s software focuses on payroll and HR management, it can support your health and safety processes. Through integration with HR functions, the system can track when risk assessments are needed for pregnant employees, helping you ensure their working conditions remain safe. It can also assist in monitoring adjustments or alternative work arrangements where necessary.

Stay Connected with Employees on Leave

Effective communication during maternity leave is essential, and PayEscape’s software facilitates this. You can set up regular notifications or updates to keep employees informed about any significant changes, such as restructures or redundancies. The employee self-service portal allows employees to access important information and make updates, ensuring smooth communication without overwhelming them.

Provide Pension Information:

Provide the retiring employee with all necessary information regarding their pension scheme. This includes details on how to access their pension, any options for withdrawing funds, and tax implications.