Payroll insight
Conclusion I’m sure that when Mrs Alabaster took her claim for her pay rise to be included in her SMP calculation she could never expected it to have the reach and impact that it has. Even now, all these years later, the recalculation of SMP following a pay rise can be complicated. All payroll practitioners should be aware of this requirement and have processes in place to ensure that all SMP calculations are revisited if pay rises are awarded. Payroll bureaux must consider the Alabaster ruling if they are told to implement any pay rises and ensure that their clients are compliant too. You can find more guidance on GOV. UK, here: https://goo.gl/T3BqCy. n
as though it was effective from the beginning of the relevant period and pay any extra SMP due. For example: Where an employee did not qualify for SMP, but a pay rise is awarded which means that when the AWE are recalculated her earnings are now high enough for entitlement to get SMP, the employer must: ● ● assume that she was entitled to maternity allowance (MA) ● ● calculate 90% of the AWE ● ● deduct from this the standard rate of SMP, and ● ● pay the difference for just six weeks. Employers that are shown evidence of how much MA has been received by the employee, usually by seeing a copy of the letter from the Jobcentre Plus office (or the Jobs and Benefits office in Northern Ireland), need to: ● ● work out the total amount of SMP she is entitled to ● ● deduct from that amount either the MA that was paid or any SMP already paid, and ● ● pay the employee the difference. The employee should still benefit from a pay rise, even if she does not intend to return to work with the employer after her maternity leave has ended.
If more than one pay rise has been awarded during the period of maternity leave the employer will need to make separate calculations for each. ...should still benefit from a pay rise, even if she does not intend to return to work... Bonuses Employers pay bonuses for a wide variety of reasons such as rewarding company or personal performance, encouraging loyalty and incentivising future work. The treatment of bonuses for those on maternity leave is a highly complex issue so legal advice should be taken. The general rule is that women on maternity leave must receive a bonus that relates to any period before they go on maternity leave (regardless of when it is actually paid), during the two-week compulsory leave period and the period after they return to work
Introduction to statutory payments
One day
The legislation for statutory sick, maternity, paternity, adoption, shared parental and associated leave, is complex and covered in detail in this informative course.
This course covers: ● Statutory maternity pay ● Statutory maternity leave
● Statutory adoption pay and leave ● Statutory paternity leave and pay ● Shared parental leave and pay ● Statutory sick pay
Book online at cipp.org.uk/training , email info@cipp.org.uk or call 0121 712 1000 for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 48 | March 2019
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