How should an employer calculate statutory maternity pay (SMP) for an employee who is on furlough leave or in receipt of sick pay during the SMP calculation period?

The calculation of an employee's statutory maternity pay (SMP) entitlement is usually based on their average weekly earnings during the calculation period: the eight weeks leading up to the 14th week before their expected week of childbirth. However, the Government has amended the rules on the calculation of SMP for employees who have been furloughed under the Coronavirus Job Retention Scheme. For periods of maternity leave beginning on or after 25 April 2020, if an employee was furloughed and on reduced wages during any part of the calculation period, their SMP should be calculated using the pay they would have earned had they not been furloughed. The legislation providing for statutory pay to be based on usual, rather than reduced, earnings also applies to the calculation of statutory paternity, adoption, shared parental and parental bereavement pay and maternity allowance.

Where, during the calculation period, an employee was in receipt of statutory sick pay (SSP) because they were self-isolating or off sick, their SMP will be calculated using their actual average pay during the period, including any weeks when they were in receipt of SSP. The amount of higher-rate SMP due will be reduced accordingly, or they may not be entitled to SMP at all if the reduced pay is less than the lower earnings limit for national insurance. The same would apply for employees on reduced hours because of the coronavirus (COVID-19) crisis during the calculation period. The legislation providing for statutory family-related pay to be based on usual earnings applies only to furloughed employees where a claim has been made under the Coronavirus Job Retention Scheme.