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The majority of working women in the UK are entitled to one year’s maternity leave from work. This can start at any time from the 11th week prior to their due date, and it consists of 26 weeks of Ordinary Maternity Leave and 26 weeks of Additional Maternity Leave.
By law, all women must take at least two weeks of leave following the birth of their child (or 4 weeks if they work in a factory). However, receiving maternity pay whilst on leave is not an automatic right for everyone. So, what are your duties as an employer?
Some employees will be entitled to maternity pay under an employment contract, whilst others will only be entitled to Statutory Maternity Pay or Maternity Allowance from the Department of Work and Pensions. There are also different rules in place for limited company directors, LLP members, self-employed women, and certain workers.
Statutory Maternity Pay (SMP) and Maternity Allowance (MA) – 2023/24 tax year
Statutory Maternity Pay
Women who are eligible for Statutory Maternity Pay can receive a maximum of 39 weeks’ pay. They will receive 90% of their average weekly earnings for the first 6 weeks, and up to £172.48/week for the remaining 33 weeks. Any persons applying to an employer for SMP must provide evidence of the baby’s due date and stipulate the date they would like their maternity pay to commence.
To be eligible for SMP, applicants must satisfy the following conditions:
- Have worked for the same employer or been engaged by the same agency for at least 26 continuous weeks into the 15th week before the baby is due
- Have average gross weekly earnings of at least the lower earnings limit. This is the level of wages where NI contributions start, which is currently £123/week
- Pregnant at, or have given birth by, the 11th before the week the baby is due
Not everyone qualifies for SMP but most women will be eligible for Maternity Allowance if they fall into any of the following categories:
- Employed but not eligible for SMP
- Currently registered as self-employed
- Recently employed or self-employed
- Not employed or self-employed but worked in the business of self-employed spouse or civil partner
MA is paid for a maximum period of 39 weeks if the individual has been in employment or self-employment for at least 26 weeks during a 66-week test period before their due date. The 26 weeks do not have to be consecutive. To qualify, average earnings must be at least £30 a week for at least 13 of those 26 weeks. The maximum amount of MA an individual can receive is £172.48/week.
For more information, please refer to GOV.UK’s detailed guide to maternity benefits.
Do I have to pay Maternity Pay to my employees?
You must provide maternity pay for employees on maternity leave if it is stipulated in their contract of employment or they qualify for Statutory Maternity Pay. You must allow female employees to take up to 52 weeks’ maternity leave for each pregnancy and provide a number of other maternity rights, namely: paid time off for antenatal care; and, protection against unfair treatment, discrimination or dismissal.
Eligibility and requirements for SMP:
- Be on your payroll
- Provide you with the correct notice period
- Provide proof of pregnancy – doctor’s letter or MATB1 certificate
- Been in your continuous employ for a minimum of 26 weeks up to the 15th week before the baby is due. This is known as the ‘qualifying week’
- Earn an average of £123/week in an 8-week ‘relevant period’
SMP can be paid to the employee through payroll on the same schedule as their usual wages. Employers can claim all or some of this back from the government. Income Tax and NIC should continue to apply to these payments.
You must continue to pay SMP to eligible employees even if they resign or the job ends after their qualifying week.
If an employee does not satisfy the criteria for SMP, you can refuse to pay it. You must issue the employee with form SMP1 within 28 days of the request for maternity pay. In such instances, it is important to make the employee aware she may be entitled to Maternity Allowance instead.
For more information, please refer to GOV.UK’s Employer guide to Statutory Maternity Pay and Leave
Paternity leave for employees
Employees are entitled to one week or two weeks’ paternity leave when their partner has a child. They may also be entitled to Statutory Paternity Pay during that time. Paternity leave can start on the day the baby is born, or on a date that is agreed in advance with the employer. This leave can be taken up to 56 days after the birth. It cannot start before the baby is born and the employee must be able to show an employer that he is entitled to paternity leave.
To be eligible for paternity leave, the following criteria must be met:
- Been continuously employed by the same employer for at least 26 weeks by the 15th week before the baby is due.
- Be the biological father of the child, or be married to or be the partner of the baby’s mother.
- Will be responsible for the child’s upbringing and wants to take paternity leave to care for the baby or support the mother.
- Provides employer with the correct notice for paternity leave.
To request paternity pay, an employee must provide the following information to his/her employer:
- Date the baby is due or the date of the birth
- Start date of paternity leave (and pay)
- Required period of paternity leave – one or two weeks
- Declaration of entitlement to paternity leave
- Declaration that the paternity leave is to support the mother or care for the child
- Self-certificates can be used to provide this information to an employer. Forms and guidance on Statutory Paternity Pay (SPP) and Leave are available online from HMRC
Maternity rights for agency workers
Women who are working through a recruitment agency may still be entitled to SMP if they meet the qualifying conditions but they are not eligible for Statutory Maternity Leave, unless they are an employee of the agency. In most cases, reputable agencies will try to come to some kind of arrangement for time off due to pregnancy.
Agency workers cannot be discriminated against in any way on the grounds of pregnancy, which includes: refusing to take a worker onto their books, terminating a worker’s job, not offering them work, treating them differently to other workers in terms of the jobs offered (unless justifiable).
Agency workers who have worked for an employer for a 12-week qualifying period are entitled to paid time off to attend antenatal classes and appointments. They must also be offered alternative assignments if they are unable to carry out a role for reasons relating to the pregnancy. If no suitable alternative can be found, they must be entitled to suspension of full pay.
Maternity pay for LLP members
Members of limited liability partnerships (LLPs) are not eligible to receive the same statutory maternity and paternity rights as employees. LLP members (partners) are self-employed, which means they do not qualify for statutory maternity/paternity leave or statutory maternity/paternity pay. They do, however, qualify for Maternity Allowance.
Despite this, many LLPs will include certain maternity and paternity entitlements in their partnership agreements. Often, partners will be entitled to a fixed period of maternity or paternity leave and a share of profits from that period. This is not mandatory, it is at the discretion of the partners when an agreement is drawn up.
Maternity pay for limited company directors
Maternity and paternity benefits for limited company directors is a particularly tricky subject area that depends on so many variables. However, as a basic rule, if you are treated as an employee of a limited company and meet the qualifying criteria, you can claim SMP or SPP from the company.
This may not be possible for sole directors of small companies, unless the business can continue to operate during a director’s time off. If there is no money coming into the business, there will be no funds to provide SMP/SPP or dividend payments.
If you are not eligible for SMP, you may qualify for MA instead. See above for eligibility.
We would advise consulting an accountant or experienced adviser for more detailed guidance pertaining to your specific situation. The Citizens Advice Bureau would be a good place to start if you do not have an accountant.
Maternity allowance for sole traders
Women who are self-employed for at least 26 weeks in a 66-week test period before they are due to give birth are entitled to Maternity Allowance from the government, provided they are registered with HMRC for Self Assessment and they pay Class 2 NIC or have a Small Earning Exception Certificate. Weekly earnings must also average at least £30/week. It is not possible, however, to claim MA through self employment if you already receive SMP from an employer.
Whilst you will be unable to work full-time when in receipt of MA, you are permitted to work 10 ‘keeping in touch’ days during your maternity leave. If you stick to that limit, you will still get your MA but you must notify Jobcentre Plus.
Depending on the type of business you run, and whether it will continue to operate when you take time off to have your baby, you may be better served setting up a limited company. SMP can often be reclaimed from the government. Therefore, you may be able eligible to receive SMP as a director who is employed through a limited company. This is a complicated area, however, so you must talk to an accountant to determine the viability of such action.