Maternity leave and pay for employers: A guide
Find out how to deal with your employees' maternity rights, your small business maternity leave obligations, and maternity pay for employers
The birth of a child is a wonderful time in your employee’s life, but it can be challenging – especially for a small business – to deal with the formalities and sensitivities surrounding maternity leave, and the decreased productivity from a lost employee.
So what are your small business maternity leave obligations? What are your employee’s maternity rights? And how do you deal with maternity pay for employees?
Maternity leave is a period of absence granted to expectant and new mothers.
Your employee should provide you with a written request for maternity leave at least 15 weeks before their due date with the following details:
- Confirmation of pregnancy
- The baby’s due date
- The requested start and end date of maternity leave
Eligible employees are entitled to take up to 52 weeks’ maternity leave no matter how long they’ve worked for your company. The earliest maternity leave can be taken is 11 weeks before the expected due date of the baby.
Maternity leave consists of:
- Ordinary Maternity Leave – first 26 weeks
- Additional Maternity Leave – last 26 weeks
New mothers must take at least two weeks leave after the birth of their child or four weeks if they are a factory worker.
Their employment rights are protected whilst they’re on maternity leave. These include pay rises, the right to accrue holiday and the right to return to work.
They are able to change their ‘return to work date’ provided they give at least eight weeks’ notice.
You are able to delay the start date for maternity leave or pay if they don’t give you sufficient advance notice and can’t provide a reasonable excuse. However maternity leave will automatically start the day after the baby is born if the mother isn’t on maternity leave already at that time.
What if the baby is born early or there are complications
Your employee is still entitled to Statutory Maternity Leave if the baby is born early, is stillborn (after the 24th week of pregnancy), or dies after birth.
The sickness trigger
If your member of staff is ill due to a pregnancy related illness in the four weeks before the expected delivery date then her leave begins immediately – this is known as ‘the sickness trigger.’
Statutory Adoption Leave
An employee who adopts or has a child through surrogacy is entitled to Statutory Adoption Leave though the rules are slightly different.
They must provide you, the employer, with the following information within seven days of being matched with a child:
- Proof of adoption
- How much leave they want
- The date the child was placed with them
- The start date of their leave
You must approve their start and end date within 28 days.
Maternity/ paternity leave for same sex couples
The ‘mother’ is then entitled to regular maternity leave and statutory maternity pay and the ‘father’ is eligible for paternity leave.
Small business maternity leave obligations
For small businesses with few employees and limited resources, maternity leave can be tricky to manage, but don’t worry, you can reclaim most or all statutory maternity pay back from HMRC.
As an employer, you are entitled to reclaim 92% of employers’ Statutory Maternity Pay (SMP) and up to 103% if your business is eligible for Small Employers’ Relief. You are entitled to this if you have paid less than £45,000 in Class 1 National Insurance contributions.
You can use payroll software to calculate how much you’ve paid in statutory pay and how much you are able to claim back. HMRC will require you to produce an employer payment summary (EPS) before the 19th of the month after the month you’re reclaiming statutory pay for.
HMRC’s basic PAYE tools can help you do this if you have fewer than 10 employers.
Maternity pay for employers
The rules for SMP are different from maternity leave. An employee won’t necessarily qualify for both.
SMP for employers
Statutory Maternity Pay (SMP) is paid for employees that are on maternity leave for up to 39 weeks. It is paid on the same schedule as your employees wages, whether weekly or monthly.
To be eligible, the employee must:
SMP amounts to 90% of your employee’s pre-tax average weekly earnings for the first six weeks and £145.18 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks.
It’s crucial to note that as it is earnings and not salary, any bonuses or commission form part of that calculation. You can use the government’s maternity, adoption, and paternity calculator for employers to work out how much your employee should be paid.
As the employer, you still have to pay SMP even if you stop trading.
Enhanced maternity pay
Some employers will offer employees enhanced maternity pay on top of SMP. This is to attract and retain employees and can differ from one employer to the next.
For example, rather than just paying 90% of their wages, you could choose to pay your employee anything up to full pay for the first six months of their employment.
Keeping in touch (KIT) days
Your employee may want to carry on working for you whilst they are on maternity leave. They can work a maximum of 10 paid keeping in touch (KIT) days without their maternity leave or pay being cut.
It is for the employer to determine their policy with regards to payment for KIT days, however as a minimum this must be at least national minimum wage for the relevant age of the employee. They cannot demand KIT days and you cannot force them to take them.
The mum can use these days to come in and talk about their return to work and they don’t have to work a whole day – even if they only work an hour, that counts as a day. KIT days can also be used for meetings and training.
If they do work more than the 10 days, this will bring their maternity pay to an end for the weeks that they work.
Your male staff can qualify for paternity leave if they meet the following criteria: they have worked for you for continuously for 26 weeks or more; they are the biological father of the child or the mother’s husband or they are expected to have responsibility for the child’s upbringing.
If you doubt that the staff member is eligible then you may ask for a copy of the birth or adoption certificate.
If the couple having the child are the same sex, one takes the role of father and one the role of mother from a family rights perspective.
How long does it last?
Fathers can take up to two weeks paternity leave – this is at the same rate as maternity pay – and it must be taken in one go.
Leave must start after the birth and end within 56 days of the child being born. Employees do not have to give an exact date of when they want to take leave but just state that it will begin on the day of birth or one week after.
They must give 28 days’ notice if they want to change the start date.
Many companies also offer enhanced paternity leave, which may be that they pay them normal pay rather than the statutory rate, or give them more time off, or both.
Types of parental leave
Unpaid parental leave
An employee is entitled to 18 weeks’ parental leave (per child or adopted child) up to their 18th birthday. Unless you agree otherwise, this is limited to four weeks in a year for each parent.
There aren’t a list of prescribed reasons but unpaid parental leave might be used in the following circumstances:
- To spend more time with their children in school holidays etc
- To spend more time with other family such as grandparents
- To settle their children into new childcare arrangements
- To look at new schools
21 days’ notice must be given in advance of the start date, or 21 days before the adopted child is expected.
Unpaid parental leave must be taken in whole weeks rather than individual days (unless you allow otherwise or if the child is disabled).
Are all parents eligible?
The parent must:
- Have worked for you for more than a year
- Be named on the child’s birth or adoption certificate
- Not be self-employed, an agency worker or contractor
- Not be a foster parent (unless they’ve agreed parental responsibility through the courts)
An employee is entitled to 18 weeks’ unpaid parental leave if their child is entitled to receive disability living allowance.
Parents do not have to be living with the child to qualify, but the leave must be taken within a set period and leave cannot be transferred between parents. However, both parents qualify if they are both working.
Shared parental leave
Parents may be eligible for shared parental leave (SPL) of up to 50 weeks and Statutory Shared Parental Pay (ShPP) of up to 37 weeks.
This needs to be taken in the first year after the birth of the child or their adoption. It can be taken in blocks or in one go.
Birth parents are eligible if they:
- Share responsibility for the child at birth
- Have been employed by your company continuously for 26 weeks by the end of the 15th week before the due date
- Stay with you while they take SPL
- Are employees and not workers
- Earn at least £116 a week
You can find a more comprehensive guide to SPL here.
All employees have the right to request flexible working – known as making a statutory application – provided they have worked for your business for 26 weeks or more.
Examples of flexible working include:
- Sharing one job role between two people
- Working from home
- Working part-time
- Working full-time but over fewer days
- Flexitime, where the employee chooses when to start and end work
You must deal with every flexible working request in a reasonable manner. This means you must:
- Assess the advantages and disadvantages of the application
- Meet with the employer to discuss the application
- Offer an appeal process
Employees can only make one application for flexible working a year. Again, any employee can make a flexible working request – not just those with caring responsibilities.
You may still have some questions about more sensitive or uncertain scenarios around maternity leave and other forms of parental leave.
If you’re in need of more complex information, visit gov.uk or The Advisory, Conciliation and Arbitration Service (ACAS) for advice and support.
Using real life case studies, we look at some situations you might be confronted by and get real business owners to provide solutions:
Can I ask a pregnant manager about her post-maternity leave plans?
Q: A key member of my management team is about to take maternity leave. It would help if we could establish on what basis she wants to return to work before she goes. Is there any way that I can approach her about this, formally or informally?
A: Derek Kemp of Liquid HR writes:
“This is a very delicate situation and you must ensure that you proceed with caution.
“You can’t insist the manager tells you what her return to work intentions are, or ask for an application for flexible working prior to her taking maternity leave. However, communication is key and you should certainly highlight, to the manager, all available options.
“A thorough handover prior to the beginning of her leave must be agreed to ensure the smooth ongoing management of the senior manager’s role. This is a great opportunity for both you and your manager to discuss all of the available options and prompt a decision regarding any intention to alter her working pattern.
“Available choices should include making her aware of her rights in relation to requesting to work on a more flexible basis upon her return, and how, as an organisation, you could accommodate such a request.
“You need to be aware that you have a ‘duty to consider’ such a request, and that the application for flexible working can only be refused when it has a detrimental impact on the organisation. This is detailed in the Flexible Working (Procedural Requirements) Regulations 2014.
“I think it’s reasonable to agree with the manager a process of communication throughout her maternity leave period. As a key member of the management team there may be issues that arise, which have previously been dealt with by the manager. Be aware that this communication should be reasonable and not give any cause for concern on behalf of the employee.”
Can I say no to part-time?
Q: One of my regional sales managers returned from maternity leave two months ago but is struggling to balance her new life and has requested to go part-time. I’d love to be able to help her, but need someone who’s motivating the sales team and building client relationships full-time – two voices wouldn’t work. How do I justify saying no without losing goodwill and where do I stand legally?
- Yasmin Halai-Carter of First Impressions Last Longer writes:
“It isn’t easy balancing full-time work and motherhood: I know how challenging this is having had a baby just eight weeks ago. My advice to you would be to think very carefully about letting your employee go. You could be making a very foolish business decision.
“Motherhood brings a whole new bundle of wisdom and business acumen. It’s tough, but when you’re in work your focus is absolute. Any time away from your baby is precious and a killer instinct kicks in when it comes to deadlines being met. I used to think like you and my honest response to one of my staff coming to me post-baby would be ‘could they cope?’, ‘are they going to be up to it?’ I couldn’t be more wrong.
“Motherhood may bring a whole new edge and dynamism to her performance and part-time doesn’t necessarily mean three days a week, either. If she is willing to work everyday and perhaps leave earlier or work through lunch it could work.
“Also you need to think about how de-motivating her leaving could be. Will other team members feel that a life outside of work isn’t celebrated? Will they appreciate her position more knowing that she is balancing both?
“If you’re adamant it won’t work, then be honest with her. Let her know that the role demands a full-time commitment and senior staff working part-time isn’t the vision you have for the company. She may surprise you and come up with an alternative.
“In terms of legalities, a return to work mother has a legal entitlement to request a flexible working arrangement but not to be granted one. There are eight DTI reasons why it might not be granted and a company has to ensure that they have undertaken due diligence in considering the request. One legitimate reason is the need to be available to work with clients.
“As an employer I think we run the risk of litigation if we don’t try and work with the employee and explain the issues faced as a business and look for ways it could work for both the organisation and the employee. As a mother I think we need to remember how important it is for us to be accepted at work without feeling penalised for having had a baby.”
Case study: How I juggled motherhood while running a successful business
So, we’ve looked at how you manage maternity leave and SMP for your employees. But what if you, the business owner, fall pregnant?
Gayle Hunter from lifestyle products marketplace The Lifestyle Hunter tells us how she juggled motherhood and entrepreneurship.
Describe your start-up barrier:
“When I started Lifestyle Hunter, I was dedicated to spending more time with my family and had promised my daughter that I would find a way to do that – however I had really enjoyed working on my previous web development business, which I had launched in 2001, and didn’t want to lose my independence.
“From a personal and business perspective, many start-ups such as ourselves have a strong level of family involvement, which can at times seem tricky to navigate.
“I have worked in partnership with my husband for 16 years, first on the same business and now on different business entities from the same room, so there’s a need to make the most of each other’s expertise as well as being able to work independently.
“A challenge for any growing retailer is managing the fulfillment of customer orders when you need to travel for business and leisure – or dedicate time to your family – and when the volume of orders varies throughout the year, especially with seasonal products.”
What were the practical steps you took to ensure you could run a successful business while raising a family?
“I spent one day a week trialling different business ideas alongside my original web development company, working on a project basis to find a business idea that worked financially and that allowed me to balance work with other lifestyle priorities.
“I drew on my own strengths and pulled on the insights and expertise of my husband where I needed it; for instance learning about specific promotions that had worked well for him.
“It’s always been important that we keep an understanding of our respective areas of expertise and that we take responsibility for separate business divisions, so that we can work independently whilst supporting each other personally as well as maximising the performance of our business entities; we both have financial stakes in each other’s respective businesses which adds an additional motivation to support and share in our successes.
“It’s also vital from a personal perspective that we both ‘switch off’ where possible at the weekends and evenings, aside from the inevitable nuts and bolts of running the business.
“We use Amazon Marketplace and, to manage demand for order fulfilment, have outsourced this aspect of the business to the Fulfilled by Amazon programme – this means that we can run the business from anywhere in the world whether on holiday or at international trade fairs, and can be assured that we will be giving our customers world-class fulfilment of their orders.”
What was the outcome?
“I have been able to spend significantly more time with my family, spending five months out of the last 24 months overseas with my husband and children, as well as more time with them after school and at weekends.
“Meanwhile, the business has grown year-on-year since 2014, with this current financial year seeing a growth of 35% over last year, to an annual turnover of half a million pounds.”
What three questions should entrepreneurs ask themselves while balancing business with family commitments?
- “Being able to spend more time with my family whilst growing a successful retail business has not happened by accident. It is something that I absolutely determined would be a measure of my success. What is it you want in terms of work-life balance (or your own personal success measure), and how are you going to make that happen?”
- “How can you work smarter and not just harder – to get the most out of the hours you are prepared to put in? Outsourcing key parts of the business can make a big difference, but you need to determine which parts of your business are the right parts for you to outsource. They need to be partners that are a good fit for your business, and can do things better, faster, and more cost effectively than you could do yourself.”
- “How can you upscale your offering without directly increasing the amount of personal time required to do that?”
What one piece of advice do you think business owners should take on board?
“Plan the outcome you want to realise, then keep that at the centre of your mind at all times.”
Is there anything you would do differently?
“No, but the philosophy of continuous improvement is essential. If any mistakes are made, the value in them is learning from them and improving from the learned outcome going forward.”