News and Events

What Employers Need To Know About Recent Changes To Maternity Benefits

View profile for Joan Casson
  • Posted
  • Author

There have been some recent changes to the benefits to be provided to employees on maternity leave and we provide employers with a quick update below.

Salary Sacrifice Schemes and Maternity Leave

A frequent problem for employers is deciding what employees are entitled to receive whilst on maternity leave. Happily, at least one vexing issue in this area has recently been resolved by the Employment Appeal Tribunal (the EAT).

Except for pay, women on maternity leave are entitled to receive the same benefits they would have received if they were still at work.  An employer discriminates if it does not provide those benefits during that period.  But what about childcare vouchers issued under a salary sacrifice scheme?  HMRC guidance had stated that they must continue to be provided during ordinary maternity leave.

The EAT has now held that childcare vouchers are ‘pay’ since the vouchers were substituted for pay under the salary sacrifice scheme.  As a result, those vouchers did not have to be provided during maternity leave, and no discrimination occurred by discontinuing them during that period.

It seems an obvious result but, as can be seen from the HMRC guidance, such issues are not always so clear.  This decision should apply to other salary sacrifice schemes.  

Increase to Maternity Pay Rates

The annual increase in statutory maternity pay has now occurred.

Employers know that an employee qualifying for statutory maternity pay is entitled to a weekly rate of 90% of the employee’s average weekly earnings for first six weeks of maternity leave.  As of this month (April 2016), the weekly rate for the remaining 33 weeks of entitlement will be £139.58 or 90% of the employee’s average weekly earnings, whichever is lower.

 If employers need help with maternity issues please contact Tilly Bailey & Irvine's Employment Team.

your business matters