While you are on maternity leave, your employment continues and 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.
All employees have a statutory right to 5.6 weeks (28 days) of statutory annual leave or holidays per year. Statutory annual leave is a legal minimum. If you work 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.
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 annual leave to the next leave year. This is because maternity leave is a maximum of 52 weeks, or one year, and you cannot take annual leave and maternity leave at the same time.
If you resign during maternity, you are entitled to pay in lieu of the holidays you have built up during leave but not taken. 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.
You are not entitled to ‘remuneration’ during maternity leave, which means salary or wages. This means that you are not entitled to your basic pay and other payments that you regularly receive from your employer as part of your salary package, which may include car allowances.
The law is not clear about car allowances, so you will need to discuss with your employer whether your car allowance is considered part of your salary or it is an extra benefit. You can argue that remuneration is only basic pay and that you are entitled to receive benefits such as a car allowance or mortgage subsidy as they appear separately on your pay slip.
If you get a car allowance instead of the use of a car you have a stronger arguable that you should continue to get the allowance during your leave, as the right to a company car continues during maternity leave if it is for personal and business use. There has been one Employment Tribunal case where it was decided that a car allowance was not payable during maternity leave, but this does not necessarily have to be decided in the same way by other tribunals.
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.
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).
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. For example, if you were at work for half of the 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).
Where the due date for payment of a bonus or commission falls during maternity leave, if the commission relates to work you did before you started maternity leave, this will be payable. You are also entitled to the proportion of any bonus that relates to the time you were on compulsory maternity leave (the two weeks immediately following the birth of the baby or four weeks for factory workers). If you usually earn commissions you may 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, your 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.
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.
If a pay-rise is awarded during your maternity leave when you are receiving Statutory Maternity Pay (SMP) or are unpaid, you are still treated as receiving it at the beginning of your maternity leave.
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. The rule is that your SMP is calculated according to your average earnings during an eight-week reference period ending with the Qualifying Week. But, a pay-rise that is (or would have been) awarded after the start of this eight week reference period but before the end of statutory maternity leave must be taken into account in calculating SMP, as if the pay rise had taken effect at the start of the reference period.
In effect, this means that the pay rise is backdated for SMP, and you will receive it earlier than other employees. Even if the pay rise is awarded in the last week 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.
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.
There is no statutory obligation to continue to pay salary-sacrifice childcare vouchers during maternity leave and while receiving Statutory Maternity Pay (SMP). Vouchers must still be paid when:
- The vouchers are not salary sacrifice – they are paid in addition to wages.
- There is a contractual obligation to continue to pay.
- There is sufficient contractual maternity pay to sacrifice to pay for the vouchers.
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. If your pension scheme requires you to pay contributions, those will be based on maternity pay (SMP or enhanced maternity pay) that you receive.
You will continue to be entitled to pension contributions from your employer during some of your Additional Maternity Leave (the last 26 weeks of the 52 weeks’ maternity leave), for the time you are still getting maternity pay (SMP or enhanced maternity pay). 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.
It is not clear whether you are entitled to pension contributions after paid maternity leave has ended. You should seek advice if there is a dispute with your employer about this.
This advice applies in England, Wales, Scotland and Northern Ireland. If you live in another part of the UK, the law may differ. Please call our helpline for more details
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.