Rights during maternity leave (as an employee)

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.

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.

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.

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).

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.

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

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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