Frequently asked questions about maternity leave and pay

Maternity leave and pay is a complex area for both employees and employers alike. Our frequently asked questions (FAQs) aim to provide you with clarity around some key questions that are often asked in relation to maternity leave and pay. 

The following FAQs are designed to provide guidance for both employers and employees. While some questions may appear to be aimed at one group specifically, the information shared is often relevant to both. Employees can benefit from understanding their employer’s responsibilities, and equally employers can benefit from understanding what their employees are entitled too.

If you have any other questions not answered below or would like to speak to one of our specialist Employment Law or Payroll advisors, please get in touch to discuss your own personal situation.

Maternity leave and pay FAQs for employers and employees

How much maternity leave is available to take?

If you are legally classed as an employee, whether full or part-time, you have a right to take up to 52 weeks’ maternity leave – from the first day of starting a job. It is compulsory for an employee to take 2 weeks’ maternity leave from the day they give birth, or 4 weeks if the employee works in a factory.

After compulsory leave has been taken, an employee can decide how many further weeks they would like to take. The total number of maternity leave weeks cannot exceed 52.

When should a pregnancy be disclosed to the employer?

An employee must notify their employer they are pregnant no later than the 15th week before the baby is due. When informing an employer, an employee needs to provide evidence of their pregnancy in the form of a MATB1 – this can be obtained from a midwife or doctor once you are 20 weeks pregnant.

What is ‘Ordinary Maternity Leave’?

The first 26 weeks of maternity leave is known as ‘Ordinary Maternity Leave’ and the following 26 weeks is known as ‘Additional Maternity Leave’.

Does annual leave continue to accrue during maternity leave?

Annual leave entitlement is still accrued as ‘normal’ whilst an employee is on maternity leave.

Who is eligible for Statutory Maternity Pay (SMP)?

To be eligible for SMP an employee must:

  • Earn at least £123 a week on average.
  • Have worked for the employer for 26 weeks before the 15th week before their due date (the qualifying week).

You can find out using the Government Calculator how much SMP you should expect to receive.

If an employee is not eligible for SMP via the payroll or employer, they will need to be issued an SMP1 form by their employer in order to claim from the jobcentre.

Can I claim SMP if I’m self-employed?

No, you cannot claim SMP. However, you can claim Maternity Allowance (MA). To claim SMP you must have a full-time employment contract with a company that deducts National Insurance and pays you through PAYE.

You are entitled to MA once you have completed 26 weeks of self-employment in the 66 weeks before your baby is due and is paid at a standard rate of £187.18 (provided you pay Class 2 NI contributions). The MA claim is made through Jobcentre Plus who verify your eligibility with HMRC. Eligibility is based on National Insurance (NI) contributions.

How is SMP entitlement determined?

The first 6 weeks are paid at 90% of the employee’s average weekly earnings. For the remaining 33 weeks, SMP is a flat rate of £187.18 per week, or 90% of your average weekly earnings; whichever is lower. A further 13 weeks can be taken however it will be unpaid unless your employer specifies otherwise. SMP is paid in the same way as your wages, therefore, both tax and National Insurance (NI) will be deducted.

Is maternity leave available in the event of a stillbirth?

You are entitled to maternity leave if your child is stillborn after 24 weeks of pregnancy or born alive at any stage of pregnancy but does not survive (neonatal loss). If eligible, you will also be entitled to maternity pay.

Is paid leave available if a baby is born prematurely?

Under the Neonatal Care (Leave and Pay) Act 2023, parents of newborns needing neonatal care will qualify for up to 12 weeks of paid leave. This leave is in addition to existing maternity and paternity leave and pay entitlements.

The length of leave and the amount of statutory neonatal pay will depend on how long the baby requires neonatal care. The provisions will apply if the baby receives continuous neonatal care for more than seven days before reaching 28 days old.

This initiative aims to ease the pressure of returning to work or relying on unpaid leave, allowing parents to focus on their baby’s care. Once implemented, neonatal care leave will be available to employees from their first day of employment.

The new entitlements for neonatal leave and pay are anticipated to take effect in April 2025.

What happens to pension contributions during maternity leave?

The employer must determine how the pension contributions should be handled while the employee is on maternity leave if the employee is part of a group personal pension plan.

Each scheme basis and pension provider differs, therefore it is best to check on your company agreements to ensure you are not underpaying pensions.

Can bonuses be payable during maternity leave?

Whether an employee receives a bonus during maternity leave depends on the type of bonus. If the bonus is based on the organisation’s performance, it should be paid to employees on maternity leave as long as they meet the conditions, such as being employed and not in a notice period. For individual performance-based bonuses, employers can pro-rata the payment based on the time worked and certain periods of maternity leave (e.g., compulsory leave or keeping in touch days). Failing to pay these bonuses fairly could amount to maternity discrimination or breach of contract.

What is 'Alabaster Ruling'?

Alabaster (named after a ruling from the European Court of Justice brought to the court by Mrs. Alabaster): If a pay increase is awarded to the employee between the start of the eight-week set period for calculating average weekly earnings for SMP, and the end of the statutory maternity leave, then the Alabaster ruling applies and the average weekly earnings for SMP must be recalculated based on this increase.

An Alabaster payment may be due based on this recalculation however, if an employee received enhanced contractual maternity pay a payment may not be due, if the employee still received more (than would have been due following the recalculation). The employer can still choose to make the Alabaster adjustment payment though.

How are pay increases handled while an employee is on maternity leave?

Being due a pay increase whilst on maternity leave is known as the ‘Alabaster ruling’ and more information on the ruling can be found in the question above. Below, we have provided an example of recalculating average weekly earnings (AWE) and SMP based on the increase.

Original calculation
Qualifying periods Oct-24 £2,500.00
Nov-24 £2,500.00
AWE: £576.92 (the two periods * 6 / 52)
SMP: £519.23 (*90%)
Pay rise given to an employee (whilst off on maternity leave):
Recalculate the qualifying periods based on the new pay (incorporate any overtime etc):
Oct-24 £2,600.00
Nov-24 £2,600.00
AWE: £600.00 (the two periods * 6 / 52)
SMP: £540.00 (*90%)
Difference in SMP: £20.77 a week
Due as Alabaster through SMP: £124.62 6 weeks

What redundancy protections are in place for pregnant employees and those returning from maternity leave?

Prior to 6 April 2024, employees on maternity, adoption and shared parental leave who were at risk of redundancy must have been offered suitable alternative employment ahead of the other at-risk employees if such positions were available. From 6 April 2024, this protection was extended to pregnant employees and those who have recently returned from a period of family leave within 18 months of their child’s birth/ placement for adoption.

What should be considered when an employer offers an enhanced maternity scheme?

Some employers offer ‘enhanced’ or ‘contractual’ maternity pay. If your employer offers enhanced maternity pay, it is worth familiarising yourself with the terms of the enhanced benefit as each employer differs and full details will be outlined in your employer’s maternity or family policies.

For instance, you may have to repay some, or all, of the enhanced amount back if you choose to leave the company within a certain time period (typically 12 months) after returning to work. Your employment rights are protected while on SMP, this includes pay rises, accruing holiday, flexible working requests when returning to work.

Is there a right to return to the same job after maternity leave?

If an employee only takes ordinary maternity leave (the first 26 weeks), then they are entitled to return to the same job role. If an employee takes additional maternity leave (the following 26 weeks) – after they have taken ordinary maternity leave – then they are entitled to return to their job on the same terms and conditions, however, if there has been a significant change within the organisation, then the employer could offer the employee a similar job role. This cannot be on lesser terms such as pay.

Is it possible to work while on maternity leave?

10 Keeping in Touch (KIT) days may be worked during SMP without an employee losing that week’s maternity pay. If more than 10 KIT days are worked, then by law SMP will automatically end.

How can Price Bailey help?

At Price Bailey, our Employment Law team can support employers in creating a Neonatal care (Leave and Pay) policy. Our team can also support you with the updating of contracts of employment to mention the Neonatal care (Leave and Pay) policy, as contracts will be required to make reference to any paid leave that employees and entitled too.

Our Payroll team can ensure you meet your payroll obligations, leaving you to focus on the other aspects of running your business.

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We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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