Payment for keeping-in-touch days worked example 2

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

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

Maggie 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.

Maggie agrees with her employer that she will work three keeping-in-touch (KIT) days. These days all fall in the fifth week of her maternity leave (the higher-rate SMP period).

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

Maggie has worked no previous days during her maternity leave.

Action

The employer should pay Maggie £225 for the week in which she works the three days.

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 Maggie 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.

Maggie 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 Maggie's days of work are in the fifth week of her maternity leave, they fall 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 Maggie has agreed to work only three days, 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. Maggie 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 keeping-in-touch pay exceeds this in any week. The employer may therefore count the £150 that Maggie earns for the KIT days towards its SMP liabilities and should pay her £225 (ie her normal rate of SMP) for the week in question.

Alternative scenarios

KIT days fall within lower-rate SMP period

If Maggie's three KIT days were worked in one week between the seventh to 39th week of her maternity leave, they would fall during the lower-rate SMP period when she is being paid £139.58. The employer would therefore have to pay Sarah £150 (ie the amount agreed for three days' work) for the week in which she works three days, and may offset the £139.58 statutory maternity pay payable for the week against the contractual pay.

KIT days fall within unpaid SMP period

If Sarah's three KIT days were worked in one week between the 40th to 52nd week of her maternity leave, they would fall outside her SMP period. The employer would therefore have to pay Sarah £150 for the week in which she works three days. As Sarah is no longer in receipt of SMP, the £150 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.