Maternity pay: The Workingmums guide

Date: 1 Jun 2010

Maternity pay is a minefield and many women continue to be confused. Here, our Workingmums guide leads you through the baffling red tape and outlines your rights and the allowances for part-time, agency and fixed-term contract workers.See our Workingmums guide complete with case studies, outlining your rights and the allowances made for part-time, agency and fixed-term contract workers.

What is statutory maternity pay?

The official guidance from the Advisory Conciliation and Arbitration Service (ACAS) says women are entitled to Statutory Maternity Pay (SMP) if they have been employed by their employer for a continuous period of at least 26 weeks ending with the 15th week before the expected week of childbirth, and if they have average weekly earnings at least equal to the lower earnings limit for National Insurance contributions.

From April 2010 the standard rate of SMP is £124.88 a week (or 90% of your average weekly earnings if this is less than £124.88 a week). For the first six weeks the rate is 90% of average weekly earnings with no maximum limit. The standard rate of SMP is reviewed every April.

SMP can be paid for up to 39 weeks; it is payable by the employer but partly (or, for small firms, wholly) reimbursed by the state.

The first 26 weeks of maternity leave are referred to as Ordinary Maternity Leave (OML). During this time women are entitled to the same contractual rights, including pension and holidays, that they would have enjoyed had they not been on leave. Additional Maternity Leave (AML) is the second 26 weeks of maternity leave. This starts on the day after the OML period finishes. Your employer does not have to offer you the same job when you return from AML if it isn’t practical but they do have to offer you appropriate similar employment.

Are temporary workers and those on fixed-term contracts entitled to SMP?

Many mums-to-be get confused because they don’t know whether they are entitled to SMP because they are working on temporary or fixed-term contracts. Fixed-term or temporary workers are, however, entitled to maternity leave in the same way as permanent employees but there are some points to remember.

Some employees find that they need to make a claim for SMP after their contract has expired. A point that was raised in a question submitted to Workingmums.co.uk. Advice given by Jane Barclay, group HR manager for Ede and Ravenscroft, said that the worker would have a right as long as they met the requirement for continuous service.

Confusion also abounds as to whether a worker is actually an employee or not. Tracey Guest, head of employment and a partner at Slater Heelis Collier Littler, based in Manchester, says that an ‘employee’ has a different status for income tax and national insurance purposes than a self-employed person and what can confuse matters is that an employer may class a worker as temporary even though they have worked at the place of employment for years. This is important because to claim SMP you need to prove that you have completed 26 weeks of continuous service and that your average earnings at the time are at least equal to the lower earnings limit for National Insurance contributions. See Tracey’s advice .

Women who aren’t classed as employees but are defined as workers - such as agency workers - may be entitled to Maternity Allowance (currently £124.88 per week or 90% of your average gross weekly earnings (before tax) whichever is the smaller) which is paid for 39 weeks and can be claimed via Jobseekers Plus. Guidance from Directgov stipulates that you can claim Maternity Allowance if you’re employed, but not eligible for SMP, you’re registered self-employed and paying Class two National Insurance Contributions (NICs), or hold a Small Earnings Exception certificate or you have recently been employed or self-employed. You may also be eligible if you’ve been employed and/or self-employed for at least 26 weeks in your ‘test period’ (66 weeks up to and including the week before the week your baby is due.) Part weeks count as full weeks; and you earned £30 a week averaged over any 13 weeks in your test period.

Jane Barclay gives advice to a locum, employed by the same agency for the past few years who now wants to claim some maternity pay.

Pregnant whilst on maternity leave can I get pay?

Some women fall pregnant whilst they are still on maternity leave. The Trades Union Congress advises that maternity leave in this instance does not break your continuity of employment, so your right to maternity leave for the new pregnancy will be based upon your total service with the employer. You are also eligible for SMP as long as you meet the normal requirements. You must give the same notice of your intention to take OML as you did the first time, that is by the end of the 15^th week before your child is due and you must give your employer the information in writing if they request it. Once you have given notice of the date that you intend the leave to begin on, you can subsequently change your mind and vary the date. In this case you must notify your employer of the variation at least 28 days before the new date begins, or if this is not reasonably practicable, as soon as is reasonably practicable.

The TUC says that it is important that you physically go back into work for a period – even just one day – in order to maintain all of your rights. Mums will, however, have the same rights as they would have received on returning from AML i.e. the right to return to the same job, or if that is not reasonably practicable, a suitable alternative job on similar terms and conditions.

You should also note that SMP is calculated on average earnings of eight weeks before the 15th week before the baby is due. Therefore, if you received SMP or Maternity Allowance for your first period of maternity leave, then your next maternity leave will be calculated using the actual amount of money you received in this time.

Therefore returning to work between the two leave periods may increase the amount of SMP you receive, particularly if you can return eight weeks before the end of the 15th week before the baby’s due.

See further expert advice from Workingmums at Advice & Support.

Entitlement to two lots of maternity pay from two part-time jobs:

Some women work two part-time roles. In this case you are allowed to claim maternity pay and leave from both employers but this must be done on a pro-rata basis for each job. You should only receive the same amount of maternity pay as someone who works in a full time job. The same notifications and qualifications exist. If you have worked for one employer for 26 weeks by the qualifying week, but not the other, you will only be entitled to receive maternity pay for the first one.

Refunding enhanced maternity pay:

Some employers offer contractual maternity pay that is better than SMP. Sometimes workers who choose not to return at the end of their maternity leave period are asked by the employer to refund their pay. The TUC says this is only lawful if it was agreed in advance or specifically stated in a maternity policy. In these cases, you only have to pay back the extra contractual pay, not the SMP part of the maternity pay.

In our workingmums case study, an employee requested to return to work part-time but was declined and told she had to return full-time with the penalty of paying back her enhanced pay if they failed to do so. Advice from Helen Climance, a lawyer from Lemon & Co Solicitors shows that this can be fair.

Pregnancy-related discrimination:

Some workers are faced with redundancy and/or discrimination whilst pregnant. In a question on this subject, Helen Climance says that women need to be clear whether they are being treated less favourably because of their pregnancy see: Suspected pregnancy discrimination: ask the expert.

The TUC says if you are dismissed while you are pregnant or during maternity leave, your employer must give you a written statement of the reasons for the dismissal. If you are unhappy with these reasons and you want to make a claim against your employer, or if you think you have experienced unfavourable treatment because of pregnancy or maternity, you should seek advice from a legal expert.

If you are made redundant whilst on maternity leave you must be offered first refusal on any suitable alternative employments. As with any redundancy the employer must follow the proper protocol on process and consultation for it to be lawful. As long as you are employed after the 15^th week before the expected week of childbirth you are entitled to maternity pay even if your employment ends. You will also be entitled to notice pay on top of this. In cases where the business is insolvent the liability for SMP will be passed to the Secretary of State. For more on maternity and redundancy see our Workingmums tips: Maternity and redundancy: your rights.

It is important to contact an employment expert for specific questions related to maternity pay and case studies provided are given as examples only and need to be checked against current guidance.