Furloughed workers qualify for full parental leave entitlement

The government has announced that furloughed workers taking paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate.

Entitlement to Statutory Maternity Pay, as well as the other forms of Parental or Adoption Pay, are currently calculated through someone’s average earnings over an 8-week assessment period. For Maternity Allowance, entitlement and the rate payable are also determined by looking at average earnings over a 13 week period. Workers whose period of family-related pay began on or after 25 April will be assessed on their usual, full pay.

The changes will ensure those intending to take time off following the birth, adoption, or death of a child will not see their entitlement to pay affected as a result of being furloughed in the wake of the impacts of COVID-19.

Pregnant women and new mothers are entitled to take up to 52 weeks of Maternity Leave. Up to 39 weeks are paid. For women who qualify for Statutory Maternity Pay (SMP), this is paid at 90% of usual earnings for the first 6 weeks, followed by 33 weeks at the statutory rate (currently £151.20).

Adoption Leave and Statutory Adoption Pay (SAP) are the same.

To be eligible for SMP or SAP, a person’s average weekly earnings must be at least equal to the Lower Earnings Limit (currently £120 per week) over a prescribed 8-week test period. A person’s earnings over this period are also used to determine the earnings-related rate of SMP or SAP for the first 6 weeks.
Maternity Allowance is a benefit paid to working mothers (including self-employed mothers) who do not qualify for SMP – this is worth up to £151.20 a week for up to 39 weeks. Entitlement to MA, and the rate payable, are determined by reference to 13-weeks earnings in a 66-week test period.

Statutory Paternity Pay is up to 2 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings. Shared Parental Pay is up to 50 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings. Statutory Parental Bereavement Pay is 2 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.

To be eligible for Paternity, Shared Parental and Parental Bereavement Pay, a person’s average weekly earnings need to exceed the Lower Earnings Limit (currently £120 per week) over a prescribed 8-week test period.

Please contact Simran Lalli if you would like more information about the issues raised in this article or any aspect of employment law.