Maternity rights and Statutory Maternity Pay (SMP) for nannies are two tax and payroll topics that our clients frequently ask us about. This article aims to provide employers of nannies and other domestic staff with key details regarding the main issues.
Statutory Maternity Pay
Statutory Maternity Pay (SMP) is payable to an employee if they have worked for you for at least 26 weeks by the end of the 15th week before the expected week of childbirth. In effect this means that if your nanny becomes pregnant after commencing work with you will be responsible for paying her SMP.
SMP is payable at two rates. The first rate is 90% of the gross salary for the first six weeks and at a lower rate £145.18 for 2018/19 for the following 33 weeks. If your nanny returns to work or takes on alternative employment before the end of this period, SMP will cease. However, the employer can agree up to 10 “keeping in touch days” where the employee can work without losing maternity pay entitlement.
The SMP is funded by HM Revenue & Customs and Taxing Nannies can help you obtain this in advance so that you have the money available to pay your nanny. HMRC funds the full gross salary together with a further 3% (which in practice normally covers the cost of employer’s national insurance).
In order to apply for the SMP in advance your nanny will need to obtain a MAT B1 from the nanny’s doctor, which is issued after 20 weeks of pregnancy. This form should be sent to us as soon as it is available.
SMP should be paid either weekly or monthly. We do not suggest that the payments are made as a lump sum as this is likely to increase the amount of national insurance payable and also would have to be clawed back if the full amount of maternity leave is not taken for any reason.
Maternity leave
All employees are entitled to 52 weeks maternity leave regardless of whether they qualify for statutory maternity pay.
Maternity leave can begin at the earliest at the start of the 11th week before the expected week of confinement and the employee must notify the employer in or before the 15th week before the baby is due. The employee can vary the date on which she intends to start her maternity leave provided that she gives the employer notice of the new date 28 days before the date originally notified.
The employer must write to the employee within 28 days of the employee’s notification stating her expected date of return at the end of her maternity period.
When an employee returns to work she does not need to give her employer notice of her return if she intends to return at the end of the period of maternity leave. However, if she wishes to return at an earlier date then she must give at least 8 weeks’ notice of her intended date of return.
If the employee does not wish to return to work at all she must give her employer contractual notice, or statutory notice, whichever is greater.
Rights and obligations during pregnancy and maternity leave
Employers must be aware that regardless of length of service, employees must not be subject to detrimental treatment on the basis that they are pregnant, have given birth, or have taken or intend to take maternity leave. New or expectant mothers are also protected by the Sex Discrimination Act 1975 which deems it direct discrimination to refuse employment to a person on the grounds of pregnancy, or to dismiss them on the grounds of pregnancy or childbirth.
All pregnant employees are entitled to reasonable paid time off to attend pregnancy-related medical examinations within working hours. This may also include reasonable time for parentcraft or relaxation classes.
Holiday entitlement continues throughout maternity leave. Recent case law has determined that failure to allow a woman on maternity leave the right to take accrued but unused holiday gives rise to sex discrimination. The nanny can either take some or all of her holiday entitlement before commencing her maternity leave. When the nanny either returns to work or formally leaves her employment any remaining unused holiday must be available to be taken or paid.
Employees who have a company car are entitled to retain the car for the first 26 weeks of maternity leave but there is no automatic entitlement for the second period of leave.
Rights and obligations when returning from maternity leave
Employees are expected to – and can expect to – return to work at the end of their maternity leave period on the same terms and conditions as before. This means that a request to bring the nanny’s baby to work can be refused.
The employee has the right to request part-time or flexible working, and this request must be given proper consideration and only rejected on substantial grounds. We urge any client who receives a request for flexible working to consider whether the proposal is at all possible before replying to the employee. We have a form we can provide to clients receiving a flexible working application which documents and evidences the request.
Information correct at April 2015
