Employee Rights during maternity leave
While you are on maternity leave, your employment continues and you continue to benefit from all of your rights and benefits as though you were at work, except for your wages.
This article will clarify what happens to your other rights and benefits as an employee on maternity leave, including:
- Holidays and annual leave
- Car allowances
- Commissions and bonuses
- Pay rises
- Other contractual benefits
- Childcare vouchers
- Pension contributions
You can read our article on Maternity pay and benefits to help you work out what kind of pay or benefits you can get while on maternity leave.
Holidays and annual leave
All employees have a statutory right to 5.6 weeks (28 days for full time employees) of statutory annual leave or holidays per year. Statutory annual leave is a legal minimum. If you are a typical part time, this amount should be given pro-rata. This can include bank holidays, although some employers offer additional paid holiday than the statutory minimum.
Note if you are a term-time or atypical worker please contact us for tailored advice regarding holiday entitlements.
The government has a useful calculator for working out your entitlement to annual leave.
You continue to accrue annual leave during your maternity leave as if you were at work. If possible, speak to your employer before you go on maternity about when to take your holiday. For example, some women prefer to take holidays before they start maternity leave, and some prefer to take it at the end of their maternity leave. Others like to use their annual leave to create a phased or part time transition back to work.
If you don’t take all of your annual leave entitlement before your maternity leave, your employer must allow you to carry over any statutory annual leave to the next leave year. (If you get additional contractual annual leave your employer can decide whether to allow you to carry this over). This is because maternity leave is a maximum of 52 weeks (one year), and you cannot take annual leave and maternity leave at the same time.
If your employment ends during your maternity leave, you are entitled to pay in lieu of the holidays you have built up during leave but not taken until the termination date. You do not have the right to pay instead of paid holidays unless you leave employment — if you do not leave employment, you must be allowed to take the holiday and be paid for it as normal.
For more information about your rights during maternity leave, please refer to our article on Holiday Entitlement while on Maternity/Shared Parental Leave.
What happens to holiday entitlement when an employee is on maternity leave?
Employees on maternity leave continue to accrue statutory annual leave, which for a full-time employee is 5.6 weeks (28 days) per year. This includes bank holidays. Some employers also offer additional contractual annual leave, which should also continue to accrue whilst on maternity leave.
The law does not allow either statutory or contractual annual leave to be taken whilst an employee is on maternity leave. The employee may therefore (where possible) take any accrued annual leave in that same holiday year in which it accrued e.g. before going on maternity leave or after returning from maternity leave.
What happens if accrued leave cannot be taken in the same holiday year? Can holiday be carried over following a period of maternity leave?
If holiday entitlement which accrues during maternity leave cannot be taken before the end of the holiday year in which the employee returns from maternity leave, the question of whether that leave can be carried over into the following holiday year will differ depending on whether the leave is statutory leave or contractual leave.
An employer must allow an employee to carry over the statutory holiday entitlement that accrues during maternity leave if the employee is unable to take that accrued leave before the end of the holiday year in which they return to work. No payment in lieu of statutory holiday entitlement is permitted other than on termination of employment. It must either be taken or it will be lost.
However, if the employee is entitled to additional contractual leave, the employer may allow the employee to carry over that additional contractual leave if it cannot be taken in the holiday year in which the employee returns to work, or the employer can choose to make a payment in lieu of that holiday. The employer could face allegations of discrimination if it refuses to permit contractual annual leave to be carried over.
Employers and employees can agree that the employee add holiday which will accrue during maternity leave to the period immediately before their maternity leave begins, to avoid this issue.
What happens if I take annual leave before my statutory maternity leave begins but then give birth early (during my annual leave)?
It is not possible to take statutory annual leave and maternity leave at the same time. If an employee gives birth early whilst on annual leave, that annual leave will stop immediately and maternity leave will begin automatically. The untaken holiday will be available to be taken at the end of maternity leave.
What happens to bank holidays, “discretionary” leave such as office closure at Christmas, and annual leave accrual for school staff whilst on maternity leave? Can they be carried over?
Bank holidays
Where bank holidays are included within an employee’s statutory annual leave allowance (i.e. they form part of the 5.6 weeks’ available to full-time employees), they will continue to accrue while the employee is on maternity leave and may be carried over into the subsequent holiday year (see above).
However, if an employee is entitled to bank holidays in addition to the 5.6-week statutory minimum (or additional contractual leave) they will accrue and may be carried over if the employer agrees, or the employer may choose to make a payment in lieu (see above).
Discretionary Leave
If an employer exercises its discretion and provides employees with additional holiday (not amounting to a contractual right), those additional days will continue to accrue during maternity leave as though the individual had been at work and any ability to carry them over will be treated in the same way as contractual leave.
Shut down periods
Employers sometimes specify particular days where employees must take annual leave, a common example being seasonal shut down over Christmas. If those days are included in the employee’s holiday entitlement, (whether statutory or contractual) they will continue to accrue whilst on maternity leave, as explained above. Whether they may be carried over depends on the type of leave (as above).
School staff and Annual Leave
An employee on maternity leave will continue to accrue holiday (whether statutory and contractual) whilst on maternity leave (as above).
The employee will then be entitled to carry over their statutory entitlement of 5.6 weeks’ per year if this cannot be taken in the holiday year in which it accrues. However, given the length of school holidays the need for carry over may be limited. Carry-over of additional contractual holiday entitlement will be treated in the same way as set out above but again, given the length of school holidays the need for carry over may be limited.
Cars and Car allowances
You are not entitled to ‘remuneration’ during maternity leave, which means salary or wages. This means that whilst you are entitled to continue to benefit from your rights and benefits while on maternity leave, you are not entitled to your basic pay and other payments that you regularly receive from your employer as part of your salary package. Whether or not you should continue to benefit from a car or car allowance during maternity leave will depend on whether the car or car allowance is considered part of your wages. Unfortunately the law is uncertain in relation to this.
If you are provided with a car for business use only, it is unlikely to be considered a benefit in which case, there is no obligation on your employer to continue to provide you with the car during maternity leave.
If you are provided with a company car and allowed to use it for some personal use and you are not offered a car allowance (cash sum) as an alternative to the car, there is a strong argument that in this situation the car should not be regarded as part of wages or salary and your employer should continue to provide it during maternity leave.
If you are provided with a car allowance, you will need to discuss with your employer whether your car allowance is considered part of your salary or it is an extra benefit. Many employers treat car allowances in the same way as wages or salary and do not pay them during maternity leave. You may have a stronger argument that the car allowance is not salary or wages if it appears separately on your pay slip. Similarly, if the car allowance is paid as an alternative to receiving the use of a car, this may strengthen the argument that the payment should be considered a benefit rather than wages or salary.
Do I get to keep a company car whilst on maternity leave?
Whether or not an employee may keep their company car whilst on maternity leave depends on the permitted use of the car. If they are entitled to use the car for business use only, the employer is not obliged to allow the employee to continue using the car whilst on maternity leave. However, if the employee is entitled to use the car for personal use as well as business use, they will be entitled to keep their company car whilst on maternity leave.
Can I continue receiving a car allowance whilst on maternity leave?
Whilst on maternity leave, the law allows an employee to keep any benefits they are entitled to under their employment contract, except for anything that falls under their wages or salary (remuneration). If a car allowance is regarded as part of wages or salary, there is no legal obligation on an employer to continue paying it during maternity leave, whereas a car allowance that is not regarded as part of wages or salary must continue during maternity leave. This can be a difficult distinction and the law is not conclusive on the classification of car allowances, but some guidance is set out below.
If an employee’s car allowance appears separately to wages on a wage slip, this can be a useful indicator that the car allowance is not part of their wages and should be considered a benefit. A car allowance is likely to be kept separate from wages on a wage slip because the amount paid as car allowance is not pensionable, and/or because the employer does not want the car allowance to increase whenever wages or salary increase. If an employee is given a choice between a company car or a car allowance, this is also helpful in showing that the car allowance is a benefit.
Conversely, if the car allowance is paid as a sum of money and accounted for in some way on the payslip, making it a cash benefit that an employee may spend in the same way as the rest of its wages, taxable in the same way by HMRC as an element of wages or salary and likely treated as pensionable by the employer, all of these features increase the likelihood that a car allowance is considered as part of an employee’s wages or salary and therefore not payable on maternity leave. Therefore, whether an employee may keep their car allowance whilst on maternity leave depends on their individual circumstances and you may wish to take advice on your specific circumstances.
Who is responsible for servicing the car while you are on maternity leave?
Typically, if an employee is entitled to retain their company car during maternity leave, an employer will remain responsible for servicing and maintaining a company car whilst an employee is on maternity leave. However, it is important to check the specific terms of the employment contract and company car policy. It is also helpful to agree with your employer before you go on maternity leave how you will be contacted about car related matters when on maternity leave.
Commissions and bonuses
Whether or not you are entitled to a bonus or commission is a complicated area of the law, as there are different types of bonuses and there have been many tribunal cases on this issue.
The general position is that bonus or commission payments that are part of your salary or regular earnings or performance-related pay are likely to be regarded as remuneration so are not payable during maternity leave if they relate to the maternity leave period.
However, it would be maternity discrimination and unlawful deduction of wages to refuse to pay the proportion of bonus or commission that relates to a time:
- that you were at work,
- that you were working ‘Keeping in Touch’ (KIT) days,
- on annual leave, or
- on compulsory maternity leave (the first two weeks of maternity leave following the birth of the baby or four weeks for factory workers).
Your employer should pay your bonus or commission pro rata to cover these periods where you are at work or considered to be at work (i.e. the compulsory maternity leave or annual leave). You need to consider the period of the bonus, is it the financial year or the calendar year. For example, if you were at work for half of the bonus year and on maternity leave for the other half, you should be entitled to half of the bonus or commission (if you meet the conditions attached to the bonus such as achievement of performance targets) and for the two weeks compulsory maternity leave.
If you usually earn commissions you will be entitled to receive payment for commission that you earned before you went on maternity leave even if it is paid while you are on leave. You may also be entitled to payment of commissions that you would usually earn, during the period of compulsory maternity leave.
To work out whether you might be entitled to a bonus or commission payment during your maternity leave, you should check:
- in the case of a bonus, the type of bonus (contractual or discretionary),
- what the bonus or commission has been or is supposed to be paid for (for example, work done in the past, as a reward for high performance, in connection with a period of service); and
- the period to which it relates (is it payable in respect of work you have done before going on maternity leave even though the date for payment is during your maternity leave? Is it an annual bonus and how does this overlap with your period of maternity leave?)
If you have been refused all or part of a bonus or commission, you should discuss it with your employer to try to understand why they believe it is not payable. If the position is not clear or you do not agree, you should seek further advice.
How do I know if it is genuine discretionary bonus or regulated by contract?
Where a bonus is regulated by the employment contract (ie contractual), an employee is entitled to receive it provided that any conditions specified in the contract, such as performance or sales targets, are met. A discretionary bonus is offered at the employer’s discretion.
Sometimes bonuses described as discretionary can in fact be contractual.
If a bonus is described as discretionary in the contract and the decision to award a bonus is at the discretion of the employer, it is likely to be a discretionary bonus. However, if for example there has been a practice of making bonus payments for a number of years, this may be sufficient to evidence that the bonus has become contractual on the basis of custom and practice, entitling the employee to receive it (subject to conditions being met).
It is important to check the employment contract and consider seeking further advice on this area if it is relevant to you.
How is my bonus entitlement affected by maternity leave?
Whether or not an employee is entitled to a bonus or commission is a complicated area of the law, as there are different types of bonuses and there have been many tribunal cases on this issue.
The general position is that bonus or commission payments that are part of an employee’s salary or regular earnings or performance-related pay are likely to be regarded as remuneration so are not payable during maternity leave if they relate to the maternity leave period.
However, it would be maternity discrimination and unlawful deduction of wages to refuse to pay the proportion of bonus or commission that relates to a time:
- that an employee was at work,
- that an employee was working ‘Keeping in Touch’ (KIT) days,
- on annual leave, or
- on compulsory maternity leave (the first two weeks of maternity leave following the birth of the baby or four weeks for factory workers).
The employer should pay an employee’s bonus or commission pro rata to cover these periods where the employee is at work or considered to be at work (i.e. the compulsory maternity leave or annual leave). It is important to consider the period of the bonus: is it the financial year or the calendar year? For example, if an employee were at work for half of the bonus year and on maternity leave for the other half, the employee should be entitled to half of the bonus or commission (if they meet the conditions attached to the bonus such as achievement of performance targets) and for the two weeks compulsory maternity leave.
If an employee usually earns commissions, they will be entitled to receive payment for commission that they earned before they went on maternity leave even if it is paid while they are on leave. They may also be entitled to payment of commissions that they would usually earn, during the period of compulsory maternity leave.
To work out whether an employee might be entitled to a bonus or commission payment during their maternity leave, it is important to check:
- in the case of a bonus, the type of bonus (contractual or discretionary),
- what the bonus or commission has been or is supposed to be paid for (for example, work done in the past, as a reward for high performance, in connection with a period of service); and
- the period to which it relates (is it payable in respect of work an employee has done before going on maternity leave even though the date for payment is during their maternity leave? Is it an annual bonus and how does this overlap with the employee’s period of maternity leave?)
Can a bonus payment be prorated whilst I am on maternity leave?
Bonus payments are often pro-rated during maternity leave to reflect the time the employee has spent at work. The exception is in relation to the two weeks of compulsory maternity leave during which the employee should still be entitled to be paid a bonus.
What if, whilst on maternity leave, it will be more difficult or impossible for me to achieve a condition or target required for me to receive any bonus?
The criteria applicable to a bonus scheme must not be discriminatory, including against employees who have been absent on maternity leave. If a bonus is based on an individual employee’s performance, for example, on the employee reaching a target, which would be impossible or excessively difficult for the employee to achieve because of time spent on maternity leave, it may be considered discrimination if an employer makes no adjustment to the criteria and refuses to pay any bonus.
For example, if an employee has to reach an annual sales target in order to be entitled to a bonus but spends 60% of the financial year on maternity leave, the sales target should be reduced by 60% to reflect the time the employee spends on maternity leave.
The employer would likely be able to reduce pro-rata the amount of the bonus awarded in this instance to reflect time spent on maternity leave. If a bonus is based solely on an organisation’s performance and the organisation meets any conditions attached to employees’ bonuses, an employee on maternity leave should receive a bonus in full, irrespective of any maternity leave.
Pay rises
A woman on maternity leave should receive a pay rise awarded during her maternity leave, like any other worker. To deny such an increase to a woman on maternity leave would discriminate against her as, had she not been pregnant, she would have received the pay rise.
Effect of pay rise on Statutory Maternity Pay (SMP)
If you are eligible for SMP then it is paid at the following rates: For the first 6 weeks you get 90% of your average weekly earnings and for the following 33 weeks you get whichever is lower of the statutory amount and 90% of your average weekly earnings is paid. (For further information on your rights to SMP please see here).
The higher rate of SMP is calculated by considering your weekly earnings during the period of eight weeks that immediately preceded the 14th week before the expected week of childbirth. This will include all earnings during this reference period including any overtime, commission or bonus. If a pay-rise is awarded during or back dated during this reference period then it must be taken into account when calculating the amount of SMP.
In addition case law has decided that if a pay rise takes effect after the eight week reference period but before the end of the maternity leave period then that must be taken into account for the purpose of calculating SMP as if the pay rise had taken effect at the start of the reference period., even if you will effectively receive it earlier than other employees. Even if the pay rise is awarded in the last 13 weeks of statutory maternity leave (by which time the you may have already exhausted your entitlement to SMP), your whole SMP entitlement from day one will have to be recalculated and a top-up payment made.
To determine how much additional SMP you are owed, your employer should recalculate your average weekly earnings as if these earnings included the pay-rise.
Effect of pay rise on contractual maternity pay
The law around the effect of pay rises on contractual maternity pay is less clear. Under the Equality Act, an employee must receive a pay rise at the time it would otherwise have been awarded had she not been on leave, and her contractual maternity pay must be “subject to” the pay rise.
The Equality Act does not require pay rises to be backdated in calculating contractual maternity pay (in the way that the SMP Regulations do in respect of SMP).
How are pay rises impacted by maternity leave?
Employees are not entitled to receive remuneration (salary/wages) whilst on maternity leave, but they are entitled to receive the benefit of any pay rise they would have otherwise enjoyed if they were working. Not only must their pay reflect the increase once they return to work, their maternity pay will also need to be adjusted. For the purposes of statutory maternity pay (“SMP”), any pay rise during maternity leave will require the employer to recalculate the employee’s statutory maternity pay and pay them the difference.
Other contractual benefits
Benefits such as a company car, mobile phone, luncheon vouchers, club membership, health and other insurance continue as normal during maternity leave.
You can keep a company car or mobile phone provided for personal use by your company. Also, participation in share schemes, professional subscriptions, free or subsidised travel, and subsidised childcare should continue.
What happens to benefits such as private medical insurance, life insurance, professional subscriptions, gym memberships and such like whilst on maternity leave?
An employee is entitled to continue receiving any benefits that are provided for in their employment contract, provided that they are not considered ‘remuneration’ (salary/wages). With this in mind, in the absence of anything to the contrary in the employment contract, private medical insurance, life insurance, professional subscriptions, gym memberships and discounts all typically continue throughout an employee’s maternity leave.
Childcare vouchers
There is no statutory obligation to continue to pay childcare vouchers which are provided under a salary-sacrifice scheme during maternity leave and while receiving Statutory Maternity Pay (SMP). However, childcare vouchers must still be paid when:
- The vouchers are not salary sacrifice — they are paid in addition to wages and can be considered as separate to remuneration.
- There is a contractual obligation to continue to pay.
- There is sufficient contractual maternity pay to sacrifice to pay for the vouchers.
Pension contributions
Maternity Leave
An employer is required to automatically enrol all eligible jobholder as active members of an automatic pension enrolment scheme unless you opt out. It is a requirement for the employer to make contributions, and it most cases it will be a requirement for you to also contribute. Contributions are calculated as a percentage of pay.
During the first 26 weeks of your maternity leave (Ordinary Maternity Leave), your employer must continue to pay full pension contributions as though you were working normally, whether or not you plan to return to work after your leave. This applies whether you are being paid Statutory Maternity Pay (SMP) or Maternity Allowance. It also applies if you are not receiving maternity pay.
Your employer’s contributions must be based on your normal pay that you would have received if you had not been on maternity leave. If your pension scheme requires you to pay contributions, those will be based on the actual pay that you are receiving during this period, being maternity pay (SMP or enhanced maternity pay). You will also be entitled to accrue pensionable service during any period of OML.
You will continue to be entitled to pension contributions from your employer during any period of paid Additional Maternity Leave (the last 26 weeks of the 52 weeks’ maternity leave). This applies whether you are in receipt of SMP or enhanced maternity pay.
There is no requirement for your employer to make contributions or to accrue pensionable service during any period of unpaid AML. Entitlement ends once maternity pay ends. As with OML, your employer’s contributions should be based on your normal pay and your contributions should be based on the maternity pay you actually receive.
As your contributions during Maternity Leave are likely to be less than they would have been if you had been working, you may want to consider increasing your contributions whilst on leave. For example, if you were normally paid £2,500 per month, and paid 3% towards your pension, that would equate to £75 per month. However, if your maternity pay was, for example, £1,500 per month, and you paid 3% towards your pension, this would equate to £45 per month. You would therefore have a monthly reduction of £30 per month towards your pension
Shared Parental Leave (SPL)
SPL can be either paid or unpaid, which will determine the position on pension contributions.
During a period of paid SPL, you should pay pension contributions based on the salary you receive in the same way as with maternity pay (see above). However, the employer will pay contributions as if you were earning your normal salary. During unpaid SPL, no pension contributions are required.
Adoption Leave
An employee is on “paid adoption leave” if they are receiving:
- Statutory adoption pay (SAP).
- Contractual adoption pay.
- A combination of both.
During periods of paid adoption leave your employer’s pension contributions to a pension scheme should be calculated as if you are working normally and receiving your normal salary.
If the scheme rules require you to contribute towards the scheme, your contributions can only be calculated by reference to the amount of contractual pay or SAP you are actually receiving. It is up to your employer whether or not they make up this shortfall.
Paternity Leave
An employee is on “paid paternity leave” if they are receiving:
- Statutory paternity pay (SPP)
- Contractual paternity pay
- A combination of both.
During periods of paid paternity leave your employer’s pension contributions to a pension scheme should be calculated as if you are working normally and receiving your normal salary.
If the scheme rules require you to contribute towards the scheme, your contributions can only be calculated by reference to the amount of contractual pay or SPP you are actually receiving. It is up to your employer whether or not they make up this shortfall.
Parental Leave
The statutory right is to unpaid parental leave (up to 18 weeks per child until the child reaches the age of 18, with a maximum of 4 weeks per child per year. There is no statutory right to paid parental leave.
If your parental leave is paid, your employer must continue to make contributions based on the pay you actually receive. If your contributions are compulsory, you must also make contributions on the basis of the pay actually received.
If parental leave is unpaid, your employer has no obligation to continue any contributions
Will my employer continue to contribute to my pension during my maternity leave?
This depends on whether the employee receives maternity pay whilst on maternity leave. The basic position is that if an employee is on paid maternity leave (and that can be statutory or contractual), the employee must maintain any pension benefits as if the employee were working.
If this is the case for an employee with a defined contribution scheme, the employer must continue to make contributions based on the normal pay the employee would receive if not on maternity leave. The employee, however, is only required to make contributions based on their actual pay received, so may make lower contributions if their maternity pay is less than their salary.
If the employee is required to make a minimum contribution though in order for the employer to be required to contribute, the employee must continue making these contributions out of their maternity pay to continue receiving employer contributions.
If an employee is on unpaid maternity leave, the employer is not obliged to make pension contributions (unless the employment contract provides otherwise).
How will a pay rise that occurs whilst I am on maternity leave affect the level of contributions my employer is required to make to my pension scheme?
This will depend on the type of pension scheme. For final salary and other defined benefit schemes, an employer’s contributions are not directly linked to an employee’s salary so will not typically be affected by a change in the employee’s salary.
In the context of defined contribution schemes, if an employee receives a pay rise whilst on maternity leave, the employer must adjust its contributions on the basis of the increased salary.
What happens to my pension contributions whilst on maternity leave if I am part of a salary sacrifice pension arrangement?
The law requires all benefits provided as a result of a salary sacrifice to continue during maternity leave and there has been no conclusive law excluding pensions from this position. Therefore, an employer should continue to make the same level of contribution to the employee’s pension, based on the employee’s pre salary sacrifice salary. As for employee contributions, these will continue but they cannot be made if doing so would result in payments less than SMP.
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us
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The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.
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