Managing maternity leave - an SME guide

POSTED: 2nd June 2014
IN: Guides

All female workers are entitled to certain support and protection when they decide to start a family, and there are few who would argue with the need for these provisions.

All female workers are entitled to certain support and protection when they decide to start a family, and there are few who would argue with the need for these provisions. undefined

However, there is no doubt that periods of maternity leave can bring some logistical and financial challenges for businesses, particularly smaller firms with limited resources.

There are actions employers can take to improve their ability to deal with this particular scenario, such as ensuring they are up to date with the latest regulations and having policies in place to manage staffing changes.

Current regulations

Statutory maternity leave regulations currently state that eligible employees can take up to 52 weeks off work. This is divided into two blocks of 26 weeks known as 'ordinary' and 'additional' maternity leave.

Pregnant women can take their leave from 11 weeks before the expected week of their baby's arrival at the earliest. They must take off at least two weeks after the birth, or four weeks if they work in a factory.

Statutory maternity pay (SMP) is available for a period of up to 39 weeks. This is usually set at 90 per cent of average weekly earnings (AWE) before tax for the first six weeks, and £138.18 or 90 per cent of AWE (whichever is lower) for the remaining 33 weeks. Tax and national insurance deductions continue during this period.

Different entitlements apply for certain types of employees, such as agency staff, directors and education workers.

Some companies offer maternity schemes that provide more than statutory provisions. Details about such policies should be clear and easily accessible to your workforce.

Certain employment rights, such as holidays and returning to a job, are protected during maternity leave, and you are still required to pay SMP even if you cease trading.

Government regulations also state that pregnant workers must inform their employer at least 15 weeks before the baby is due, or before they want to begin their maternity leave. A notice period of 28 days is required for employees who want to claim SMP.

In order to qualify for leave, employees must have a contract, regardless of how long they have worked for you, and need to provide the correct notice.

Payment of SMP is based on conditions such as proof of pregnancy and having worked for you continuously for at least 26 weeks up to the 'qualifying week' - the 15th week before the expected week of childbirth.

The difficulty for businesses

It is not hard to see why maternity leave can be such a headache for businesses - all of a sudden you are faced with the prospect of losing one of your staff members for up to a year.

You are expected to continue paying the employee, albeit at a lower rate, while getting to grips with the SMP timetable. Furthermore, employers are required to ensure that a woman on maternity leave has the option to return to her job, even though there may be no guarantee she will be coming back.

Writing in the Telegraph, Josephine Fairley, co-founder of chocolate brand Green & Black's, said maternity leave can be a "nightmare" for businesses.

However, she also argued that companies could be "missing a trick" and depriving themselves of a valuable resource if they fail to accommodate new mums within their enterprise.

"Mothers are generally keen as mustard to prove that they're as capable (if not more so) than they were before giving birth," wrote Ms Fairley.

"Sure, there may be childhood illnesses and sports days and childminders going sick occasionally to throw a spanner in the works - but in my experience, female employees make up for lost time in the wee small hours to get a job done, if that's what it takes."

Research published in August last year suggested that up to 50,000 women taking maternity leave each year cannot return to their jobs because of employer discrimination.

Up to 14 per cent of the 340,000 new mothers returning from leave every year find their positions under threat, according to data analysed by the House of Commons library.

Managing maternity leave

This is a common issue for businesses, so the good news is there has been plenty of thought given to the best ways to manage maternity leave periods.

In an article published in September 2013, the Guardian asked if small and medium-sized enterprises (SMEs) "have the edge" when it comes to dealing with this issue.

Rob Brown, a business coach and networking expert, underlined the importance of agility and resilience to adversity, two characteristics that are closely associated with SMEs.

"High on passion and dedication, the commitment made by individuals to keep a small business thriving in tough times is something rarely seen in the corporate world," he added.

However, Mr Brown also noted that a "seemingly low-key event" can have serious ramifications for smaller firms, meaning careful planning and preparation are crucial.

Darren Fell, managing director of Crunch Accounting, also emphasised the importance of preparing for change with early implementation of necessary measures, and underlined the value of having a solid team around you.

He revealed that his company strives to implement crossover periods to ensure a smooth handover of responsibilities between members of staff.

"In the case of a more specialised role, it's about investing the time in HR to find a solid and capable replacement until they return," added Mr Fell.

"Creating positions or flexible working around the real needs of individual members of the team creates unbelievable loyalty to the business."

David Evans, employment partner at law firm Cripps Harries Hall, pointed out that workers are required to give at least 15 weeks' notice before taking maternity leave, meaning firms have more time to prepare for this scenario than for short-term or intermittent absences.

It is important for companies to make the most of the resources on offer to help with managing maternity leave, such as the government's maternity pay calculator.

There is also financial support available, with most employers able to reclaim 92 per cent of statutory maternity, paternity and adoption pay. You could even reclaim 103 per cent if your business qualifies for small employers' relief.

Companies are expected to keep records for HM Revenue and Customs, including proof of pregnancy, the date maternity pay started and dates of payments.

Maternity leave could be a cause for concern for some SMEs, but careful planning and good workforce management should ensure that business disruption is kept to a minimum. Furthermore, firms that have a positive and flexible approach to this issue could be rewarded through improved morale, loyalty and motivation in their workforce.

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