Maternity Leave Employers Guide

As an employer, understanding maternity leave laws in the UK is important when managing employee rights. We have put together an employers guide to breakdown the laws, processes, and your responsibilities when an employee is pregnant or on maternity leave.

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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).
Maternity Pay in the UK (1)

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.

Need help to understand what solution is best for your business?

Speak with our expert team today on 028 2764 1060

Employee Rights During Maternity Leave

It’s vital to understand your employees’ rights while on maternity leave to avoid legal issues, find out more below:

Can an Employee Work While on Maternity Leave
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
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.

Employee Benefits While on Maternity Leave

While on maternity leave, employees are entitled to continue receiving the same benefits they would if they were working. This includes:

Accruing holiday entitlement.
Continued pension contributions (if applicable).
Access to other non-cash benefits, such as health insurance, company car, or gym memberships. You are not required to provide cash bonuses during maternity leave unless your company policy states otherwise.
Employee Benefits While on Maternity Leave

How payroll can help manage the process

When an employee informs you of their pregnancy, managing the associated leave and pay can be a complex process. Payroll services like PayEscape can help this process using software to ensure compliance and reduce administrative burdens. Here’s how PayEscape can help:

1

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.
2

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.
3

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.
4

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.
5

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.

Other Areas to Consider for Employee Maternity Leave 

Pension Contributions

During paid maternity leave, pension contributions should be maintained. Your contributions must be based on the employee’s usual salary, while the employee’s contributions are based on the SMP they receive.

Holiday Entitlement

Employees continue to accrue holiday entitlement while on maternity leave. This includes statutory holiday entitlement, which they can take before or after maternity leave.

Returning to Work After Maternity Leave

If an employee returns to work after 26 weeks or less (Ordinary Maternity Leave), they have the right to return to the same job with the same terms and conditions. If they take Additional Maternity Leave (more than 26 weeks), they still have the right to return to the same job unless it’s not reasonably practicable, in which case a similar role must be offered.

Flexible Working Requests

Employees returning from maternity leave often request flexible working arrangements. Under UK law, employees with 26 weeks’ continuous service have the right to request flexible working, and employers must handle such requests in a reasonable manner. You are not obliged to agree to every request, but you must provide a valid business reason for any refusals.

Integrate Payroll and HR into your business with PayEscape

Employee maternity leave can be a challenging process that requires careful planning and adherence to legal requirements. Let PayEscape help you manage maternity leave, pay, and other HR needs with ease, ensuring your business stays on track and fully compliant.

Book your free demo now.

Need help to understand what solution is best for your business? Speak with our expert team today on 028 2764 1060

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