How to Avoid Paying Statutory Maternity Pay – The employers guide
Well, of course, ( hopefully ) you are shocked that I could write this heading. So maybe you already know Statutory maternity pay ( SMP) is calculated on what you actually receive during your reference period not what you should have been paid?
SMP rate is calculated on an employee’s “normal weekly” earnings. This is calculated as a weekly average of total gross earnings from your employer during a particular reference period (the “relevant period”). To calculate …..
Take the last normal pay day on or before the end of the Qualifying Week. That normal payday is the last day of the relevant period.Count back 8 weeks from that day.Take the last normal pay day before that date. The day after that payday is the first day of the relevant period.
If during this 8-week relevant period, an employee worked reduced hours, and thus received reduced pay, this will result in her receiving less statutory maternity pay as the “normal weekly earnings” in this 8-week period will have been reduced. Fortunately for the employer, there is nothing that can be done about this. (at the moment … always like a challenge me:) )Also, if that pesky employee, is off sick with pregnancy related sickness and getting less money ie only SSP and they fall below the lower earnings limit then again you are in luck you don’t have to pay.
Or use this calculator so you can know for certain which dates to make payroll mistakes in or forget about paying overtime or forget to pay bonus or SSP!
So if as in a recent case I am supporting your employer messes up (deliberately or otherwise ) and does not pay you what they should have done and your earnings fall below the lower earnings limit then they could avoid paying SMP altogether. Is this where we HR professionals start to talk about employee engagement ?:P
This case is currently in review with HMRC and then will probably move to tribunal but I would welcome views on whether you believe it is fair that an employer’s mistake (or otherwise) on payment during the reference period should lead to an employee not being able to receive SMP?
I am thankful none of my clients would behave like this !