REWARD INSIGHT
What circumstances affect SMP entitlement?
Danny Done, managing director at Portfolio Payroll, discusses the issues and offers advice
W hilst all pregnant employees have the right to take 52 weeks’ statutory maternity leave, regardless of their length of service, individuals must meet certain eligibility criteria in order to qualify for 39 weeks of statutory maternity pay (SMP). Those who fail to meet the initial criteria may be entitled to ‘maternity allowance’ which is paid to them directly by Jobcentre Plus (part of the Department for Work and Pensions). However, there are also a number of other circumstances which can hinder an employee’s right to SMP. Whilst employees may participate in self-employed work during maternity leave without this affecting their SMP, choosing to work for another employer can put their right to payment at risk. If your employee starts work for another employer after the qualifying week, but before the baby is born, you don’t have to pay them SMP for any weeks they work for that employer after the baby is born. However, you must still pay SMP for any full maternity weeks your employee doesn’t work for that employer. In addition, if your employee starts working, after the baby is born, for someone who did not employ her during the qualifying week then you will no longer be required to provide SMP. This will remain the case even if their contract with this employer comes to an end during the maternity pay period. Employees also have a right to utilise
ten keeping-in-touch (KIT) days whilst on maternity leave, allowing them to return to work on several occasions without forfeiting their right to SMP. Whilst KIT days must be agreed between you and the employee in advance, those who wish to exceed the ten-day limit should be aware that they will lose a full week’s SMP for any week in which they participate in extra work, even if this is just one day. ...a written explanation by way of a SMP1 form to explain why they do not, or no longer, qualify for SMP... Despite popular belief, an employee may retain their right to SMP even after they have left their employer. This will be the case regardless of whether they resign, are dismissed or made redundant as you still need to pay them the full amount of SMP if this occurs after the qualifying week. Failure to carry out this requirement may lead to enforcement action from HM Revenue & Customs, whilst employees may even take this matter to an employment tribunal to recover any additional losses incurred because of your failure to pay. It should
also be said that any decision to terminate the employment of an employee who is pregnant or on maternity leave will always come with a risk of discrimination. Furthermore, although it may be a rare occurrence, employees who are taken into legal custody either at the beginning or during their maternity pay period will forego their right to receive SMP. In circumstances where an employee’s baby is stillborn, their entitlement to SMP will remain in place. A stillbirth occurs when the baby is stillborn after 24 weeks of pregnancy. The same applies should the baby die after the birth, but during the maternity pay period. However, where a miscarriage occurs up to the 24th week of pregnancy, the employee will have no entitlement to SMP or maternity leave. Given the various eligibility requirements for SMP it is important that human resources departments have a clear understanding of when staff may not be entitled to receive these payments. Keep in mind that some staff may incorrectly feel that they are entitled to receive SMP no matter what, and in such a situation it will be important to inform them of this in a considered and professional manner to prevent any unnecessary disputes. Individuals should be given a written explanation by way of a SMP1 form to explain why they do not, or no longer, qualify for SMP and this must be issued no later than seven days after making your decision. n
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| Professional in Payroll, Pensions and Reward | September 2019 | Issue 53
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