As employers, understanding the complexities of Statutory Maternity Pay (SMP) is crucial not just for compliance, but also for supporting the well-being of your employees. In the UK, maternity rights have long been at the forefront, and the recent introduction of the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 has further highlighted why it’s so important. This guide aims to help you navigate the basics of SMP and provide insight into the new 2023 Act.
What is Statutory Maternity Pay (SMP)?
SMP is a weekly payment that eligible pregnant employees can claim when they take time off to have a baby. It’s a legal requirement for employers to provide this to qualified employees.
SMP is divided into two parts: ordinary maternity leave, followed by additional maternity leave. Each lasts 26 weeks, meaning eligible employees can take up to 52 weeks of maternity leave. By law, employees must take at least two weeks after the birth (or four weeks if they’re a factory worker)
Who’s eligible for SMP?
While all employees with a contract are entitled to Statutory Maternity Leave, to be eligible for SMP, an employee must:
- be on your payroll in the ‘qualifying week’ – the 15th week before the expected week of childbirth
- give you the correct notice
- provide proof they’re pregnant
- have been continuously employed by you for at least 26 weeks up to any day in the qualifying week
- earn at least £123 a week (gross) in an 8-week ‘relevant period’
Some employment types, like agency workers, directors and educational workers, have different rules for entitlement. Find out more here.
How much is SMP?
SMP is paid for up to 39 weeks:
- For the first six weeks: 90% of the employee’s average weekly earnings (AWE) before tax.
- For the next 33 weeks: £172.48* or 90% of their AWE (whichever is lower).
How do I calculate SMP?
Calculating SMP can be tricky, especially if the employee’s earnings are not consistent. The key is to calculate the Average Weekly Earnings. This generally involves working out the gross earnings over a specific 8-week period leading up to the 15th week before the baby is due.
If in doubt, use the Gov.UK’s maternity, adoption and paternity calculator for employers. Find the calculator here.
How and when to pay SMP?
SMP should be paid in the same way and at the same time as you would pay salaries, i.e., monthly or weekly. It’s subject to tax and National Insurance in the same way as wages.
Can I reclaim SMP?
Yes, you can usually reclaim 92% of SMP payments. If you qualify for Small Employers’ Relief you can reclaim 103%. Your business qualifies for this relief if the total SMP you paid in the tax year is less than £45,000.
The Protection from Redundancy (Pregnancy and Family Leave) Act 2023
The introduction of the 2023 Act has made waves in the realm of employment rights. Here’s what you need to know:
Purpose of the Act
The Act primarily aims to bolster protections for pregnant employees and those on family-related leave (like maternity or paternity leave) from redundancy. It stems from a recognition that these employees often face vulnerabilities in the workplace and aims to create a safer, more supportive environment.
Though we’re still waiting for the regulations to bring the full proposals into effect, the Act’s core principle is clear: employers cannot make employees redundant during their pregnancy, maternity leave, or during a six-month protective period after the end of their maternity leave, unless in exceptional circumstances.
Implications for Employers
- Review Redundancy Protocols: Ensure your redundancy procedures comply with the new law. Redundancies involving pregnant or new mothers should be treated with extreme caution and sound justification.
- Training: Make sure your HR and management teams are fully briefed on the new legislation to prevent inadvertent breaches.
- Document Decisions: Always document decision-making processes, especially when it concerns redundancies. In any disputes, having a clear paper trail will be invaluable.
- Open Communication: Keep lines of communication open with your employees. Clear understanding and transparency can prevent misunderstandings and foster trust.
Informed and in the know
Navigating the world of Statutory Maternity Pay and the new 2023 Act might seem daunting. But with a clear understanding and proactive approach, it’s entirely manageable. If you’re unsure how the maternity law changes will affect you or your business, or if you’ve any further questions, it’s a good idea to speak to an employment law specialist. As always, promoting a supportive and understanding workplace culture will go a long way in ensuring the well-being of your employees and the smooth operation of your business.
Stay tuned for more updates on the regulations of the 2023 Act, and for any further assistance or accounting needs, don’t hesitate to get in touch.
*figures are subject to annual changes. For current figures, take a look here