If an employee on maternity leave resigns, does the balance of her statutory maternity pay stop?
The short answer is no.
Statutory Maternity Pay
Statutory maternity pay (SMP) is paid as normal wages for up to 39 weeks of the 52 week maternity leave period at 90% of the employee’s average weekly earnings (before tax) for the first 6 weeks and then at statutory rate of £151.20 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks.
For an employee to be eligible for statutory maternity pay (SMP) certain requirements need to be satisfied namely: -
- earn on average at least £120 a week (calculation of average wage, based upon eight weeks leading up to the 14th week before their expected week of childbirth)
- give the correct notice of maternity leave
- provide proof of pregnancy
- have worked for your employer continuously for at least 26 weeks continuing into the ‘qualifying week’ - the 15th week before the expected week of childbirth
Covid-19
With on the onset of covid-19, where an employee has been on furlough and paid less than £120 a week as not working then for those furlough periods wages are calculated on the basis of what the employee would have actually earned had they not been on furlough.
Where the above criteria has been satisfied, the employee on maternity leave will remain entitled to SMP even if they are dismissed or resign from their role and do not have to repay any of their SMP back however this is qualified as SMP entitlement does stop where an employee having resigned or dismissed commences work for a new employer.
In light of the above, although it is possible to pay the SMP entitlement in a lump sum following resignation /dismissal but the option of paying SMP via the regular payroll cycle maybe a prudent alternative to avoid difficulties of seeking recovery of overpayment of SMP where employee finds another job. It may then be difficult to recoup that payment from HMRC.
Where an employer pays enhanced maternity pay, i.e. more than the statutory rate, then depending on the wording of the employment contract it is possible that the employee could lose entitlement to the additional pay upon resigning /dismissal.
If this article raises any issues for you or your organisation, please speak to our Quest HR Advisors on 01455852028.
The contents of this article is intended for general information purposes only.
