Contractual or Enhanced Maternity Pay or Family Leave Pay

Some employers may offer what is known as occupational, enhanced or contractual maternity or new parent pay.  This is paid in addition to the statutory family pay to which you are entitled, such as Statutory Maternity Pay (“SMP”) and any other benefits you may receive as part of your contract of employment.

Similar policies may be in place for adoption pay, shared parental leave and new parent pay.  Enhanced pay given to employees when family leave is taken is a perk that many organisations may offer with a view to encouraging a diverse and inclusive work place, and enabling employers to retain the best employees.

How can you check if you are eligible for enhanced maternity or family pay?

You should check your contract, look at your employment handbook or talk to your employer/HR team to find out if you are entitled to enhanced maternity or family leave pay. These documents should set out the amount of pay you can receive and how long the pay will last.  The terms of your enhanced pay should be clearly set out in your contract and/or employer’s family leave policies.

If you receive enhanced maternity or family leave pay there may be a contractual term that states that you are only able to keep the enhanced amount paid to you if you return to work for a specified time.  For example, your employer might offer 3 months of full pay, 3 months half pay followed by 13 weeks of statutory pay e.g. SMP but require that you return to work for at least 6 months following your maternity or family leave. 

Once you qualify for statutory family pay such as SMP or Maternity Allowance you will be entitled to be paid this, even if you leave work before your maternity leave is due to commence. You do not need to repay this, even if you don’t return to work after maternity leave.

Set out below are some common aspects of enhanced maternity/enhanced family pay that you may wish to look out for.

Qualification

Most employers have a qualifying period of service before an employee is eligible for enhanced maternity or family leave pay which may be longer than the qualification period for SMP.  This could require employees to complete a certain length of continuous employment before the “Qualifying Week” or “EWC” (expected week of childbirth).

Repayment and Clawback Provisions

Enhanced maternity or family leave pay terms and conditions sometime include a repayment requirement or a clawback clause.   This means if certain conditions are not met, such as returning to work for a specified period after your maternity or family leave, your employer may be able to “claw back” or require repayment of some or all of the enhanced element of the maternity or family leave pay.  You will need to look at the specific rules that apply to you.

Clawback and repayment provisions can range from a specific length of time that an employee must return to the business for before no repayment is required, to a sliding scale of clawback repayments.  Often this links to the amount of time that the employee has been back in the workplace, which reduces the amount repayable e.g. 100% repayment of enhanced element of pay if no return, 50% repayment if return for less than 6 months, 25% if return for less than 9 months.

Your employer cannot claw back Statutory Payments such as SMP, Statutory Adoption Pay or Shared Parental Pay. 

If you do not want to return to work on the date you are due back, you may ask to take accrued holiday to reduce how long you need to spend back at work. You could have quite a lot of holiday accrued from the time you were on maternity or family leave.

If your employment contract or any other document you have signed as part of your employment does not have clawback or repayment provisions then your employer cannot require repayment of your enhanced maternity or family leave pay.

What if I can’t return to work and my employer says I need to repay the enhanced maternity or family pay?

If you believe you will be unable to return or have been unable to return to work at the end of your maternity or family leave you should seek advice. If this is because you have been unable to negotiate flexible working or lack of available childcare, you should seek advice.   We have lots of information about flexible working and what to do if your request has been refused.  

Before you resign it may be beneficial to ask for a meeting with your employer or write to them to explain that you would like to return to work but a lack of available or affordable childcare has prevented this and ask to discuss the position regarding the enhanced pay.

If you are not returning to work because of your employers behaviour towards you in circumstances which would give rise to a claim for constructive dismissal or unfair dismissal, you may be able to argue that the monies are not repayable. You would need to seek legal advice in this situation.

If you decide to resign at the end of your maternity leave, you may agree that your employer can set off the holiday pay you will have accrued but not taken during your maternity leave against any amounts due to them.   You should seek further advice if this occurs. This page is also relevant. 

Requirement for prior written consent

You need to have given your prior agreement in writing for any repayment obligation to your employer to be enforceable. This may be covered by a deductions clause in your employment contract. If you have not agreed to this you may be able to argue it would be an unlawful deduction of wages under section 13 of the Employment Rights Act or an unlawful payment under section 15 of the Employment Rights Act.    

You may want to check to see if there is a deductions clause in your employment contract that is wide enough to cover this payment or to see if your employer asked for your written agreement for repayment before the maternity or family leave starts, as a condition of paying enhanced maternity or family leave pay. You may be able to argue that the clawback is not enforceable if you haven’t provided your written consent.

If you have given written agreement to the clawback provision and your contract includes a deductions clause your employer may be permitted to deduct the money from any pay due to you. The timing for repayment should also be made clear. If you do owe the money, check what your contract says about how and when you need to pay your employer back. Your employer is not allowed to take money out from your pay unless your contract says they can, even if you do owe it.

If this would cause you financial problems, you should speak to your employer as soon as possible. You can explain you can’t afford to pay so much in one go and could make an arrangement to pay the money in instalments. If the amount is not stated to be repayable immediately or by a certain date, you should be able to negotiate a repayment plan on terms that work for you. Please take further advice at this stage. You may also be eligible for financial support or benefits.

If you’re in a trade union, they might be able to give you support. For example, they might be able to negotiate with your employer or go to a meeting with you.

Citizens Advice also have a useful page: If your employer says you owe them money

My employer has wrongly deducted an amount from my pay

If your employer deducts money from your pay without an agreement in your contract allowing them to do this, you may be able to get it repaid. Write to your employer to explain why you believe they should not have taken money and ask them to repay you. You may have a potential claim for unlawful deductions from wages.

My partner is self employed and eligible for MA. I am eligible for enhanced Shared Parental Pay but my employer deducts any weeks of pay my partner takes as Maternity pay (MA) from my entitlement. Does my partner have to claim MA?

In order to create an entitlement to Shared Parental Leave (and pay) for you, your self employed partner must claim and take at least 2 weeks Maternity Allowance (MA). She must also take a minimum of 2 weeks off after the birth. She can give notice to curtail her MA in advance (and in fact must give at least 8 weeks notice to curtail). You can then take all the remaining weeks of leave / pay you are entitled to.

This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.

Our helpline and online contact form is now closed as we wind down our operations. Our free legal advice pages remain available and up to date until further notice. You can find a list of trusted organisations that may be able to help you below.