Payment for keeping-in-touch days worked example 1

NOTE: This worked example uses the rates in force as at 5 April 2015. The principles remain the same where the rates have changed. Check Statutory rates > Statutory maternity pay for the current rates.

Scenario

Sarah has worked for her employer for two years and earns £250 per week.

Sarah is pregnant and her baby is due on 6 April 2015. She is entitled to 39 weeks' statutory maternity pay (SMP). Her employer does not offer contractual maternity pay.

Sarah agrees with her employer that she will work one keeping-in-touch (KIT) day. The day falls in the fifth week of her maternity leave (the higher-rate SMP period).

The employer agrees to pay Sarah £50 for each day that she works, to be offset against her SMP entitlement.

Sarah has worked no previous days during her maternity leave.

Action

The employer should pay Sarah £225 for the week in which she works the one day.

Explanation

To qualify for SMP, an employee must have been continuously employed for at least 26 weeks by the end of the 15th week before the expected week of childbirth and must have earned, on average, at least the lower earnings limit (£112 per week from 6 April 2015) in the last eight of those 26 weeks. As Sarah has worked for her employer for two years and earns £250 per week, she satisfies both conditions.

SMP is payable for up to 39 weeks. For the first six weeks, SMP is payable at 90% of average weekly earnings. For the remaining 33 weeks, it is payable at £139.58 (from 5 April 2015) or 90% of average weekly earnings if this figure is less than the rate set by the Government for the relevant tax year.

Sarah will, therefore, be paid £225 (90% x £250) per week for the first six weeks of her maternity pay period and £139.58 for the remaining 33 weeks. As Sarah's day of work is in the fifth week of her maternity leave, it falls during her higher-rate SMP period when she is being paid £225.

An employee may work up to ten KIT days during her maternity pay period without bringing her maternity leave to an end or losing her entitlement to SMP. However, once the ten KIT days have been exhausted, the employee will lose a week's SMP for any week in which she works for her employer during the SMP payment period. As Sarah has agreed to work only one day, she will not lose her entitlement to SMP for the week in question.

The Maternity and Parental Leave etc and the Paternity and Adoption Leave (Amendment) Regulations 2006 (SI 2006/2014) do not stipulate how much employees should be paid for working a KIT day. This is a matter for the employer and employee to agree. Sarah and her employer have agreed £50 per day.

If an employee works any KIT days during the SMP period, the employer is entitled to count any contractual pay towards its SMP liabilities or, conversely, any SMP towards its contractual pay obligations for the same week. The employer will be able to reclaim most or all of the SMP from HM Revenue & Customs, but not any amount by which the KIT pay exceeds this in any week. The employer may therefore count the £50 that Sarah earns for the KIT day towards its SMP liabilities and should pay her £225 (ie her normal rate of SMP) for the week in question.

Alternative scenarios

KIT day falls within lower-rate SMP period

If Sarah's KIT day was worked between the seventh to 39th week of her maternity leave, it would fall during the lower-rate SMP period. The employer would therefore have to pay Sarah £139.58 for the week in which she works one day, and can count the £50 that Sarah earns for the KIT day towards its SMP liabilities.

KIT day falls within unpaid SMP period

If Sarah's KIT day was worked between the 40th to 52nd week of her maternity leave, it would fall outside her SMP period. The employer would therefore have to pay Sarah £50 for the week in which she works one day. As Sarah is no longer in receipt of SMP, the £50 is not offset against any SMP payment.

Warning

Employers cannot insist that employees carry out any work during their maternity leave period. Equally, employees on maternity leave cannot insist that they carry out any work. KIT days must be by agreement between the two parties. It is unlawful for an employee to suffer a detriment or to be dismissed for undertaking, seeking to undertake, or refusing to undertake, work for the employer.

Employees are not entitled to work during the compulsory maternity leave period, ie the two-week period immediately after the birth (four weeks in the case of factory workers).

Although there are no statutory requirements in relation to pay for KIT days, employers must ensure pay for work of equal value as between men and women and that employees are paid at least the national minimum wage.