National Living Wage (nlw)
and statutory holiday entitlement throughout ordinary and additional maternity leave.
With effect for those with an EWC of 1st April 2007 or later, during any paid maternity leave (SMP or contractual) the employer is obliged to pay pension contributions on behalf of the employee based on her pre-leave salary. The employee can choose to continue to pay contributions based on her lower salary. In a final salary scheme benefits must be maintained based on the pre-leave salary. InMarch 2016 an EmploymentAppeals Tribunal case (Peninsula Business Services v Donaldson) determined that where a benefit in kind is provided under a “diverted pay” scheme the benefit is part of the general remuneration and hence had to be suspended during the maternity leave of the complainant, Donaldson. Since this unexpected decision HMRC has continued to advise that BiKs must be maintained during statutory leave and further guidance is awaited. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Prior to 1st April 2007 the employer was only obliged to continue pension contributions to the end of OML as this tied up with the maximum length of the SMP period. The requirements of the Social Security and Benefits Act 1992 are such that from 1st April 2007 employer pension contributions are due until the end of the paid leave period i.e. for up to 13 weeks of the AML until 39 weeks of SMP has been paid or longer if contractual maternity pay is payable. For those with an EWC of 1st April 2007 or later the woman is entitled to come into work for up to ten days during the maternity pay period with no loss of SMP (see section on Statutory Maternity Pay), these are known as keeping-in-touch (KIT) days. The employer is entitled to make ‘reasonable contact’ with the employee whilst she is on leave to discuss details of her return to work without fear that this will lead to a claim of harassment, but making contact does not entitle the employer to end the employee’s contract early based on any indication that she may not be returning to work at the end of her leave and simply coming into work for such a discussion is not classed as a KIT day. Women may also extend the 52 week Maternity Leave period by another 4 weeks as unpaid parental leave (See also Dependant Leave and Parental Leave.) Further detail about SMP will be found in PART4, STATUTORY PAYMENTS. NATIONAL LIVING WAGE (NLW) Introduced on 1st April 2016, it requires employers to pay to a worker who is over the age of 23 (age 25 prior to 1st April 2021) a minimum rate of pay of £8.91 an hour (£8.72 up to age 25 from 1st April 2019). Employers are required to ensure the new rate applies for every day that the worker is 23 or over and not just on the day payment is made. No printing, copying or reproduction permitted. The NMW will continue to apply to workers who are under 23. NATIONAL MINIMUM/LIVING WAGE (NMW/NLW) Introduced on 1st April 1999, it established a worker’s right to be paid not less than a prescribed minimum hourly rate with limited exceptions for certain classes of workers. The rate paid to a worker under the conditions and terms of employment are averaged, over the normal pay frequency, up to a maximum of one month in order to establish that the rate paid for each hour worked is no less than the NMW.
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