27 April 2020
Any workers who are planning to take paid parental or adoption leave will be entitled to pay calculated based on their normal earnings, as opposed to their pay during furlough.
The Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Work and Pensions (DWP) confirmed in a press release that full earnings will be used for Maternity Pay, Shared Parental Pay, Parental Bereavement Pay and Adoption Pay. This will ensure that any workers who are about to take family-related leave are not being penalised by the fact that they have been placed on furlough. Ordinarily, entitlement to Statutory Maternity Pay (SMP), and other forms of Parental and Adoption Pay are calculated using an individual’s Average Weekly Earnings (AWE) over an eight-week period. Entitlement to, and the amount of, Maternity Allowance (MA) that is paid out is also dictated by earnings over a 13-week period. A statutory instrument that was laid before Parliament allows employees who take a period of family-related pay, that commences on or after 25 April 2020, to be assessed on the basis of their full, usual pay as opposed to on the furloughed amount.
The changes have been implemented to ensure that those who take time off work following the birth, adoption or death of a child will not see their entitlement to statutory pay impacted by the outbreak of coronavirus.
Paul Scully, Business Minister, commented:
“Maternity and other forms of parental leave are pivotal times in people’s lives, and they should absolutely be protected from the impacts of COVID-19.
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.”
Lords Minister for the DWP, Baroness Stedman-Scott, said:
“At an already challenging time for families, peace of mind that they can rightly take time off and receive their full entitlement will provide much needed reassurance.
Throughout this health emergency we’ve taken unprecedented steps to help those affected make ends meet, and today’s new measures further extend vital financial support.”
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Guidance for calculating statutory parental pay for furloughed employees 28 April 2020
HMRC has published guidance that advises employers how to calculate Average Weekly Earnings (AWE) for statutory payments for furloughed employees due to take periods of family-related leave on or after 25 April 2020.
Updates have been made to guidance relating to the calculation of Statutory Adoption Pay (SAP), Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Parental Bereavement Pay (SPBP), in instances where employees have been placed on furlough. The fundamental difference for employees who are on furlough and commencing a period of family-related leave, who have been paid under the Coronavirus Job Retention Scheme (CJRS), is that instead of using the standard calculation for AWE, a different method should be operated. This is to ensure that those furloughed individuals taking a period of family-related leave are not penalised for being on furlough and therefore, are not negatively impacted by COVID-19. Ordinarily, an employer would base an employee’s eligibility for statutory parental payments on the average of earnings they had actually received. However, if part of the eight week period used to calculate AWE and establish eligibility and pay figures included payments that were subject to the furlough rules, and paid at 80% of normal pay, then the employer would use the higher of either:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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