Guide to maternity leave: Key info for employers and employees

Hasib Howlader | 13th February 2015

Expecting a child? Maternity leave is a complex issue that can make a huge difference to the lives of employers and employees alike.

Hopefully this guide to maternity leave will help flag up some of the key issues.

1. Useful Information for both Employer and Employee

Any pregnant employee needs to provide written notice of when she wants to take maternity leave no later than the end of the 25^th week of pregnancy, unless this is not reasonably practicable.

The employee doesn’t have to give notice for statutory maternity pay until 28 days before she wants it to be paid.

After notice is received, the employer has to write back to the employee, confirming the date she is due back from maternity leave.

This is 52 weeks after she starts it. Employers must give this notice within 28 days of being notified about the maternity leave.

A woman can change her start date if she gives at least 28 days’ notice before the earlier of the two dates.

The earliest a woman can start her maternity leave is in week 29 of her pregnancy.

If an employee has not notified you in writing that she is pregnant, the employer may have no specific obligations. However, if he suspects an employee is pregnant he must not discriminate against her because of this.

If the employee wants to claim Statutory Maternity Pay (SMP) or Maternity Allowance (MA) then she needs to provide written evidence of the due date.

This should be done no later than 28 days before the date the employee wishes to be paid SMP or MA. The written evidence is usually a maternity certificate or MAT B1 signed by the midwife or GP.

The MAT B1 certificate is usually available on request from the expectant mother from week 20 of her pregnancy.

Pregnant employees have the right to paid time off for antenatal appointments.

As well as scans and appointments with the midwife, this can include relaxation and parentcraft classes. Employees, however, must provide proof of the appointment.

The employee doesn’t have to take 52 weeks maternity leave if she doesn’t want.

The law says she must take at least two weeks immediately after the baby is born. If she works in a factory, that number rises to a minimum of four weeks.

The employee has no automatic right to return to work part time after maternity leave finishes.

She is allowed to work for up to ten days during maternity leave without affecting the maternity pay. These are called ‘Keeping in Touch Days’.

If the baby is born early, leave starts the day after the birth.

Employees have the same redundancy rights as their colleagues while on maternity, paternity, adoption or parental leave.

The leave year and holiday entitlement is not affected by maternity, paternity or adoption leave. The employee still builds up holiday over these periods.

The only employees who don’t have the right to take 52 weeks maternity leave are:

• share fisherwomen
• women who are normally employed abroad (unless they have a work connection with the UK)
• self-employed women (may be entitled to Maternity Allowance)
• policewomen and women serving in the armed forces

Employees still qualify for leave or pay if the baby:

• is stillborn after the start of the 24th week of pregnancy
• dies after being born

Maternity leave is divided into two halves. The first 26 weeks is known as Ordinary Maternity Leave (OML)

• The employee will still get all the same rights under the contract of employment as if she was still at work. The only exception is that she will not get her normal pay unless the contract allows for it
• The employer has to allow the employee to come back if she wants
• If she is sick when she is due back at work at the end of Ordinary Maternity Leave (OML), she must send the employer a medical certificate

The second 26 weeks is called Additional Maternity Leave (AML)

• If she wishes to return to work after AML, she should receive her old job back or a similar job. “Similar” means the job has the same or better terms and conditions
• The employee may be entitled to pay during the first 13 weeks of AML
• The remainder will be unpaid leave
• Pension contributions usually stop after the first 13 weeks of AML

2. More Useful Information for the Employer

You should make sure that female employees are aware of the need for notification of their pregnancy if you feel a specific risk assessment is needed.

Once you are notified in writing that an employee is pregnant, and there is a potential risk, you must carry out a specific risk assessment.

You are entitled to reclaim SMP and offset it against the NI you owe HMRC.

3. Paternity Leave – the Basics

1. You are entitled to one or two weeks’ paternity leave when you and your partner have a child
2. You are entitled to up to 26 weeks’ paid Additional Paternity Leave only if the mother returns to work
3. You are entitled to time off to accompany your partner to two antenatal appointments
4. If you know the baby’s due date, you can work out the dates for your Statutory Paternity Leave including notice period, earliest start date and when you can take Additional Paternity Leave
5. To qualify for paternity leave for a birth, you must:

• Be employed for at least one week before the conception date
• Be the biological father of the child, or be married to – or be the partner of – the baby’s mother (this includes same-sex partners, whether or not they are registered civil partners); and
• Have responsibility for the child’s upbringing and wish to take time off to care for the child or support the mother. This responsibility for the child’s upbringing may be shared with the child’s mother

4. Payments

• Statutory Maternity Pay (SMP) for eligible employees can be paid for up to 39 weeks, usually as follows:

1. The first 6 weeks – 90% of their average weekly earnings[1] (AWE) before tax
2. The remaining 33 weeks – £138.18 or 90% of their AWE (whichever is lower)
3. Tax and National Insurance need to be deducted in the normal way

• Maternity Allowance is usually paid to you if you don’t qualify for Statutory Maternity Pay

1. You can claim Maternity Allowance as soon as you’ve been pregnant for 26 weeks
2. Payments can start in week 29 of the pregnancy
3. You might get Maternity Allowance for 39 weeks if any of the following apply:

*you’re employed, but you can’t get Statutory Maternity Pay

*you’re self-employed and paying Class 2 National Insurance contributions

*you’re self-employed and have a Certificate of Small Earnings Exception

*you’ve been dismissed or made redundant before the 25th week of pregnancy

*you’re employed or self-employed for at least 26 weeks in the 66 weeks before the week your baby is due

*you’re earning at least £30 a week over any 13-week period

*you may still qualify if you’ve recently stopped working. It doesn’t matter if you had different jobs or periods of unemployment

• The statutory weekly rate of Ordinary Paternity Pay and Additional Paternity Pay is £138.18, or 90% of your average weekly earnings (whichever is lower). You will receive the payment in the same way as your wages (monthly or weekly)

• The good news is that the employer can reclaim 92% of employees’ Statutory Maternity Pay (SMP), Paternity Pay and Adoption Pay. You are entitled to reclaim 103% if your business qualifies for Small Employers’ Relief

You are qualifying for SER if you paid less than £45,000 in Class 1 National Insurance in the last complete tax year before week 25 of your employee’s pregnancy.

OK that’s more than enough from us. Hopefully this guide to maternity leave will help but please get in touch on 020 7488 3614 if you have any questions – we’d be only too happy to help.

See below for some notes:-

[1] AWE: The average of the employee’s gross earnings over a period of at least eight weeks up to and including the last payday before the end of 25^th week of pregnancy

AWE for Directors: If the director is contractually paid a regular salary or if is paid by a formal vote, their AWE is calculated the same as it would be for any other employee

If the director is paid both contractually and by formal vote, their AWE is calculated like it would be for any other employee. However, it would only include the monies voted upon in a formal vote if the date of the vote falls in the relevant period, as mentioned above

We hope this guide has been helpful. If you are in need of a London tax advisor or have any questions about your business finances, please do not hesitate to contact us.