Last reviewed 29 April 2020
The Government has announced that furloughed workers planning to take paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate.
Entitlement to Statutory Maternity Pay (SMP), as well as the other forms of Parental or Adoption Pay, are currently calculated through someone’s average earnings over an eight-week assessment period.
For Maternity Allowance, entitlement and the rate payable is also determined by looking at average earnings over a 13-week period.
The Maternity Allowance, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay (Normal Weekly Earnings, etc) (Coronavirus) (Amendment) Regulations 2020 (SI 2020 No. 450) can be found at http://www.legislation.gov.uk/uksi/2020/450/pdfs/uksi_20200450_en.pdf.
They will ensure that workers whose period of family-related pay begins on or after 25 April will be assessed on their usual, full pay.
Business Minister Paul Scully said: “We are supporting workers and businesses in a way never seen before, in response to the unprecedented effects of COVID-19. These measures will ensure those on the Coronavirus Job Retention Scheme continue to receive the parental leave and pay they are entitled to.”
The changes will ensure those intending to take time off following the birth, adoption, or death of a child will not see their entitlement to pay affected as a result of being furloughed in the wake of the impacts of COVID-19, he continued.
Levels of payment
Pregnant women and new mothers are entitled to take up to 52 weeks of maternity leave. Up to 39 weeks are paid. For women who qualify for SMP, this is paid at 90% of usual earnings for the first six weeks, followed by 33 weeks at the statutory rate (currently £151.20). Adoption leave and Statutory Adoption Pay (SAP) are the same.
To be eligible for SMP or SAP, a person’s average weekly earnings must be at least equal to the Lower Earnings Limit (currently £120 per week) over a prescribed eight-week test period. A person’s earnings over this period are also used to determine the earnings-related rate of SMP or SAP for the first six weeks.
Maternity Allowance (MA) is a benefit paid to working mothers (including self-employed mothers) who do not qualify for SMP. It is worth up to £151.20 a week for up to 39 weeks. Entitlement to MA, and the rate payable, are determined by reference to 13 weeks earnings in a 66-week test period.
Statutory Paternity Pay is up to two weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings, while Shared Parental Pay is up to 50 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.
Finally, Statutory Parental Bereavement Pay is two weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.
Comment by Peninsula Associate Director of Advisory Kate Palmer
As employers up and down the country are now making use of the Job Retention Scheme, it seems further clarification from the Government on certain areas of its usage are becoming more and more common.
Employers will now need to take this into account when calculating the amount payable to furloughed staff about to take family leave, which could mean some fast rejigging of previously made calculations.
This could place a further burden on businesses.
However, they should remember that these provisions are now law and that employers could be subjected to potentially costly sanctions if they do not adhere to this.
That said, it should be noted that this is only for leave that is to be taken after 25 April.