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The Employer’s Guide to Parental Leave and Pay

by | Jan 30, 2019

The Employer’s Guide to Parental Leave and Pay

As a UK employer, you have certain responsibilities and duties to your employees, including parental allowance for employees who will go on maternity and paternity leave.

Not only does your role involve managing their workload and communicating their return to work but you must also ensure that payroll is set up correctly so your employees on parental leave are paid correctly and in accordance to UK Government Law and Legislation.

Parental leave can be complicated, so we’ve compiled this guide to outline your must need to knows when it comes to working out your employees’ statutory maternity and paternity leave, and how you can claim it back.

What is Statutory Parental Leave and How Long is it For?

mother and child figurine

Statutory parental leave is time that new parent(s) are entitled to take in the event of a new baby. Statutory parental leave differs for female and male employees. However, it is only available in the case of a new child. Maternity, paternity, adoption and shared parental leave cannot be used in other circumstances such as critical illness of the employee unrelated to pregnancy or critical illness of a child.

Pregnant soon to be mums are entitled to take up to 52 weeks of maternity pay. Whilst the first 26 weeks is known as ‘Ordinary Maternity Leave’, the last 26 weeks is known as ‘Additional Maternity Leave’. Whilst it is not mandatory for women to take the full 52 weeks off on leave, it is mandatory for them to take the first two weeks after birth on leave.

In comparison, new dads are only entitled to two weeks paternity leave which must be taken in altogether in a two week block. To confirm, a week comprises of the total number of days the employee normally works in a week, therefore, if your male employee works 5 days per week, he will be entitled to 10 working days, taken together, off for paternity.

To qualify for parental leave, employees must:

  • Inform you (the employer) at least 15 weeks before the expected date of birth
  • Give you the correct notice
  • Give proof they’re pregnant (MATB1 certificate for maternity leave) or that their partner is pregnant
  • Have been continuously employed by you for at least 26 weeks up to any day in the qualifying week
  • Earn at least £116 a week (gross) in an 8-week ‘relevant period’

The earliest start date for maternity is 11 weeks before the expected delivery date. In case of early birth, the employee can start leave the day after the child is born. If the employee had to have early leave as the result of a pregnancy-related illness, then maternity leave will automatically start four weeks before the expected delivery date.

Unlike maternity leave, employees taking paternity leave do not have to give the exact date of their leave. However, leave cannot start before the birth of the child and it must end within 56 days of the actual delivery date.

 

How much is Statutory Maternity (SMP) and Paternity Pay (SPP)?

man and woman working on a sofa

Statutory Maternity is payable to eligible employees for up to 39 weeks. The first six weeks are paid at 90% of their Average Weekly Earnings (AWE). The remaining 33 weeks are paid at a rate of £145.18 (2018/2019 rate) or 90% of their AWE (whichever is lower).

Paternity Pay is paid at the statutory rate of £145.18 or 90% of their AWE (whichever is lower). This rate remains the same across the two weeks leave.

Note, that both SMP and SPP are still subject to Tax and National Insurance.

 

What Employers Should Know About Shared Parental Paybusiness owner jotting down notes

Employees having a baby or adopting a child may be entitled to Shared Parental Leave (SLP) and Statutory Shared Parental Pay (ShPP). This enables the employee to share up to 50 weeks of leave and up to 37 weeks of pay between their partner.

The conditions to this are that the pay and leave must be shared in the first year after the child is born or placed within the family.

However, unlike paternity leave, SPL can be taken in blocks separated by periods of work. Shared parental leave can be taken off together or can be staggered.

Whilst this is available to both birth and adoptive parents, the eligibility criteria differs for both. Shared Parental leave is further complicated as it applies different eligibility criteria depending on whom wishes to share the SPL and ShPP, the mother or the partner. Therefore, it is advised you seek further advice to ensure you know if your employees’ are eligible for shared parental pay. 

 

Who pays for Statutory Maternity (SMP) and Paternity Pay (SPP)?

SMP and SPP is paid through payroll, the same way in which normal employee wages are paid.

However, as an employer you can claim a portion of statutory parental leave. Typically, 92% of your employees’ Statutory Maternity and Paternity Leave can be reclaimed. This also covers Adoption and Shared Parental Pay.

If your business qualifies for Small Employers’ Relief, you can claim 103%. To reclaim payments you should include them on your Employer Payment Summary (EPS) submission.

As an employer, it is your responsibility to ensure you are offering your staff the Parental Leave and Pay as required by UK Law and Legislation. Ensure your payroll is set up correctly for current or future parental payments. If you aren’t sure how to do this, reach out to our Expert Payroll Bureau.

 

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