Calculating maternity leave if your pay rises: ask the expert



Question

I am pregnant and working reduced hours for reduced pay whilst I get treatment for a medical condition that is covered by the Disability Discrimination Act. I hope to be increasing my hours/pay over the next 6 months. However, I have been told that my maternity pay will be worked out whilst I am on reduced hours/pay, so I will not get what I will be earning the day before I go on maternity leave, but what I had been earning several months prior (i.e. quite a bit less!). This does not seem fair. But can I do anything about it? I understand that if I were to get a pay rise within the time I am on maternity, they have to recalculate SMP and pay me the difference, but not a pay increase due to increased hours worked? I.e. I was working part-time then changed to full-time but I will only get the part-time wage whilst on maternity leave?


Answer by Tracey Guest

 

If you are entitled to statutory maternity pay, it is paid for a period of up to 39 weeks as follows: –

The first 6 weeks are payable at the higher rate of SMP, which is 90% of your “normal weekly” earnings;

The remaining 33 weeks are paid at the lower rate of SMP (currently £123.06 per week) or 90% of your average weekly earnings, whichever is less.

As you are aware, the rate payable therefore depends on your “normal weekly” earnings. These are calculated as a weekly average of your total gross earnings from your employer (and associated employers) during a particular reference period (the “relevant period”).

As a rule of thumb, the earnings taken into account for monthly paid employees are those set out on the last two payslips before the Qualifying Week (which is the 15th week before your Expected Week of Confinement / Childbirth). For weekly paid employees, the last eight payslips before the Qualifying Week are taken into account.

Looking in more detail, the relevant period ends with the last normal pay day on or before the end of the Qualifying Week and begins after the last normal payday at least 8 weeks earlier (Regulation 21(3) of the SMP Regulations). Therefore, to find the relevant period:-

– Take the last normal payday on or before the end of the Qualifying Week. (If you have already given birth by then, take the last normal payday before the week of birth). That normal payday is the last day of the relevant period.

– Count back 8 weeks from that day.

– Take the last normal payday before that date. The day after that payday is the first day of the relevant period.

NB: if no “normal payday” is identifiable from your contract or from the employer’s normal practice, actual payment days are used.

Therefore, if during this 8 week relevant period, you then worked reduced hours, and thus received reduced pay, this will result in you receiving less statutory maternity pay as your “normal weekly earnings” in this 8-week period will have been reduced. Unfortunately, there is nothing that can be done about this.

It is correct that any pay rise awarded after the beginning of the period used to calculate SMP and before the end of the maternity leave period, must be taken into account when calculating the amount of SMP payable. However, this rule applies in respect of a pay rise to your gross pay, and not as a result of additional pay received because you are working additional hours/days.

Unfortunately, there is nothing that can be done to change the above.

 

Tracey GuestTracey Guest is head of employment and a partner at Slater Heelis in Manchester. She specialises in employment law and is also a working mum Meet our Panel of Experts


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