EU plans to increase maternity pay

A committee of the European Parliament has voted to increase the minimum period of paid maternity leave to 20 weeks’ full pay. The change is only proposed but with changes to maternity and paternity leave in April 2010, family friendly laws are again on the agenda.

Current UK position – maternity laws

Under current UK laws, all pregnant women, regardless of length of service, may take up to 1 year’s maternity leave. If a woman qualifies for statutory maternity pay (SMP), the first 6 weeks are paid at 90% of salary, the following 33 weeks at the statutory rate of SMP and the remainder of any time taken is unpaid. SMP is currently £123.06 a week rising to £124.88 a week, effective as of 4 April 2010. This new rate will also apply to statutory paternity pay (SPP), maternity allowance (MA) and statutory adoption pay (SAP).

EU extension plans

The proposed increase in full pay to 20 weeks by the European Parliament would amend the Pregnant Workers Directive. An assessment of the likely impact of this proposed increase will now take place following concerns from member states regarding the costs of implementation and the effect on businesses, particularly in light of the current economic climate. The legislation was initially listed to go before the full European Parliament for approval on 25 March; however, this has now been postponed to 18 May 2010 to enable the impact review to take place. Whilst there are doubts as to whether the draft will be passed by the full EU Parliament if it were to become law, it would have a big impact on employers. The Institute of Directors has estimated that the changes to could mean up to an extra £2 billion a year in employment costs in the UK.

Proposed UK changes from April 2010

As well as an increase in the rate of SMP, there are also changes to paternity leave that are effective from April 2010. Currently, qualifying fathers (or those with parental responsibility) can take up to two weeks’ statutory paternity leave, which must be taken as two consecutive weeks and be completed within 56 days of the baby being born. The statutory rate for paternity pay is also £123.06 a week (or 90% of his average weekly earnings if that is less).

Under new rules from April 2010, provided the mother returns to work during or at the end of Ordinary Maternity Leave, she can transfer the remainder of her SMP and maternity leave to her partner. The new rules will apply for babies due on or after 3 April 2011.

What Should Employers Do Now?

Although EU plans could be some way off, the changes from April 2010 to maternity pay and to a certain extent paternity leave/pay should be addressed now. Where employers simply state they follow statutory rules, there is no need to change policies as the rules and the changes in rates of pay will apply automatically. Payroll should be informed of the rate changes to statutory allowances to ensure a smooth transition between the old and new rates. If however, employers restate the statutory rules in handbooks these should be amended to comply with the new rules. If employers enhance maternity/paternity leave or pay they should consider whether their rules need to change to include the new rules. The new rules will apply irrespective of employer rules if they better them. However, if employer rules are more advantageous than statutory rules, employer rules will apply.

For further information please contact our Employment team by telephone on 0118 9527584 or by email at elg@boyesturner.com.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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