Rights and benefits during adoption leave

All employees have a statutory right to 28 days (5.6 weeks) of annual leave a year (pro-rata for part-timers). This can include bank holidays, although some employers offer more paid holiday than the statutory minimum.

The government has a useful calculator for working out your entitlement to annual leave.

You continue to build up paid holidays, as if you were at work, throughout your adoption leave. If possible, talk to your employer beforehand about when to take this holiday. For example, you can take your annual leave before you start your adoption leave, or at the end of your adoption leave, or a mixture.

If you don’t take all of your annual leave entitlement before your adoption leave, your employer must allow you to carry over annual leave to the next leave year. This is because adoption leave is a maximum of 52 weeks, or one year, and you cannot take annual leave and adoption leave at the same time.

If you leave your job, you are entitled to pay in lieu of the holidays you have built up but not taken. You do not have the right to pay instead of paid holidays unless you leave employment – you must be allowed to take the holiday and be paid for it as normal.

For more information, refer to our article on Holiday Entitlement while on Maternity/Shared Parental Leave.

You are not entitled to ‘remuneration’ during adoption leave. The law states that ‘remuneration’ includes payments of wages or salary. This means that you are not entitled to your basic pay and any other payments that you regularly receive from your employer as part of your salary package, which may include 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 adoption 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 adoption leave, but this does not necessarily have to be decided in the same way by other tribunals.

This is a complicated area as there are different types of bonuses. If you have been refused all or part of a bonus 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 or accept their explanation seek further advice.

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 adoption leave.

If a payment relates to work done prior to you going on adoption leave, you are entitled to receive this whether or not you are on statutory adoption leave when the bonus or commission is paid.

To work out whether you might be entitled to a bonus or commission payment during your adoption 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 adoption leave even though the date for payment is during your adoption leave? Is it an annual bonus and how does this overlap with your period of adoption leave?)

You should also check your employer’s adoption policy to see what is says about payments during adoption leave.

If a pay-rise is awarded while you are on adoption leave, your adoption pay will not be re-calculated, as it would be for adoption pay purposes – unless it is a back dated pay-rise (see below). However, you will be entitled to the pay-rise on your return to work.

If you are awarded a back dated pay-rise that would have taken effect during the eight weeks up to and including the week in which you are matched with the child (the ‘relevant period’), your six weeks of higher rate adoption pay should be recalculated. They should reflect what your average weekly earnings would have been taking into account that back-dated pay-rise.

Benefits such as a company car, mobile phone, luncheon vouchers, club membership, health and other insurance continue as normal during adoption leave. You can keep a company car or mobile phone provided for personal use by your company throughout the time you are off. 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 vouchers during adoption leave. This is because when paid via salary sacrifice, vouchers are counted as remuneration rather than benefits.

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 adoption pay to sacrifice to pay for the vouchers.

During the first 26 weeks of your adoption leave (also called ordinary adoption leave – ‘OAL’), your employer must continue to pay full pension contributions as though you were working normally, whether or not you plan to return to work afterwards. This applies whether you are being paid adoption pay or adoption allowance or neither. Your employer’s contributions must be based on your normal pay. If your pension scheme requires you to pay contributions, then your contributions will be based on the adoption pay (Statutory Adoption Pay or contractual adoption pay) that you actually receive.

You will continue to be entitled to pension contributions from your employer during some of your additional adoption leave (the last 26 weeks of leave), for the time you are still getting adoption pay (Statutory Adoption Pay or contractual – or occupational – adoption pay). Entitlement ends once adoption pay ends. As with OAL, your employer’s contributions should be based on your normal pay and your contributions should be based on the adoption pay you actually receive. It is not clear whether you are entitled to pension contributions after your paid adoption leave has ended. You should seek advice if there is a dispute with your employer about this.