Up until now, it has been understood that employees on maternity or similar leave can continue to draw SMP (or similar) payments. It was also known that an employee could be furloughed if they were on maternity leave, or other family-related leave, but further clarification was required on how the Coronavirus Job Retention Scheme interacts with family-related leave.
Entitlement to Statutory Maternity Pay (SMP), as well as the other forms of Parental or Adoption Pay, are currently calculated through someone’s average earnings over an eight-week assessment period. To be eligible for SMP or SAP, a person’s average weekly earnings must be at least equal to the Lower Earnings Limit (currently £120 per week) over the prescribed eight-week test period. A person’s earnings over this period are also used to determine the earnings-related rate of SMP or SAP for the first six weeks.
It has now been confirmed through new legislation that furloughed workers about to take maternity leave, paternity leave, adoption leave, shared parental leave or parental bereavement leave on or after 25 April will need to have their pay assessed based on their usual, full pay and not reductions implemented as a result of the Job Retention Scheme.
Business Minister Paul Scully said: ‘We are supporting workers and businesses in a way never seen before, in response to the unprecedented effects of COVID-19. These measures will ensure those on the Coronavirus Job Retention Scheme continue to receive the parental leave and pay they are entitled to.’
The changes will ensure those intending to take time off following the birth, adoption, or death of a child will not see their entitlement to pay affected as a result of being furloughed in the wake of the impacts of COVID-19, he continued.
Organisations will now need to take this into account when calculating the amount payable to furloughed staff about to take this form of leave, which could mean some fast rejigging of previously made calculations. They should also remember that statutory rates for family leave also increased at the start of April to £151.20 per week, or 90 per cent of normal weekly earnings, whichever is lower.