• Employment
  • December 22, 2021

How maternity leave works - Quick guide for SMEs

Babies are always a cause for joy. If you run a small business, however, juggling commercial needs with providing maternity leave and pay can be challenging. This brief article defines maternity leave and sets out whether small business owners are liable to cover maternity pay.

What is maternity leave?

Maternity leave is a statutory right for an employee to take 52 weeks off work after they give birth or adopt a child. The 52 weeks' maternity leave is made up of ordinary maternity leave (OML) and additional maternity leave (AML). 

Some people are not eligible for full maternity leave, for example, those who are not an employee as defined under the Employment Rights Act 1996. They are, however, covered by pregnancy rights, for example, time off for antenatal appointments and must take two weeks leave after their baby’s birth. This is called compulsory maternity leave. For factory workers, compulsory maternity leave is extended to four weeks. If you insist an employee comes into work within those two/four weeks you will be committing a criminal offence.

It is up to the employee to decide how much maternity leave she wants to take. If she wishes to return to work before 52 weeks has elapsed, she must provide you with at least eight weeks’ notice. As an employer, you are entitled to refuse to pay until the 8 week notice period has ended, if the notice was not provided.

What is maternity pay?

Employees who have worked for you for 26 continuous weeks and earn more than a set amount (currently £120 per week) are entitled to Statutory Maternity Pay (SMP) of 90% of normal pay during the first six weeks and then, for a further 33 weeks, a fixed statutory rate (£151.97 per week as of 6 April 2021) or 90% of average weekly earnings (whichever is lower). 

Who pays statutory maternity pay?

As an employer, you can claim potentially all, or most, of your employee’s statutory maternity pay back from HM Revenue & Customs (HMRC) depending on your class one National Insurance contributions.

Whilst the employee is on maternity leave, all pay and benefits (for example gym memberships, holiday pay, and health insurance, etc.), excluding remuneration must be paid to her and these costs are paid by you.

Final words

Maternity leave and pay is a statutory right and employers can face a claim in the Employment Tribunal if they make a mistake about what these rights entail. 

It is important to consider introducing a maternity policy to help you and your staff understand the maternity leave rights and obligations. 

You must also conduct a health and safety assessment in order to assess risks for all women of child-bearing age. These include: pregnant employees and the unborn child she is carrying, an employee who's become a new mother in the last 6 months and an employee who's breastfeeding.
We have put this guide together to help SMEs owners navigate the maternity rights of their staff and ensure you are equipped with the basic information you need. It is always a good idea to contact an Employment Law Solicitor for legal advice and representation if you are still unsure about anything concerning maternity leave and pay.

Get assistance from LawBite

As an employer, you will almost certainly encounter one or many occasions when an employee announces they are expecting a baby. You have certain responsibilities towards the employee, which you should be aware of and will need to meet.

At LawBite, we offer a free 15-minute phone consultation to discuss your legal issues with an experienced lawyer. Book your consultation today!

Additional useful information

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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