UK: Maternity Benefits And The New Maternity Rights: Q&As

Last Updated: 6 January 2009
Article by Catriona J. Aldridge

Employees who are due to give birth on or after 5 October 2008 have acquired a number of additional rights under the Maternity and Parental Leave etc and the Paternity and Adoption Leave (Amendment) Regulations 2008 (SI 2008/1966) (the "New Maternity Rules"). In summary, these additional rights mean that:

  • Employers should not discount additional maternity leave ("AML") when assessing seniority or non-contractual benefits based on length of service; and
  • With the exception of remuneration, all benefits available to a woman whilst on ordinary maternity leave ("OML") or should now also be applied during AML.

Below, we answer a series of common questions raised by employers in respect of their treatment of benefits for women on maternity leave. Reference to "maternity leave" refers to both OML and AML inclusive.

  1. Should employees continue to be paid car allowance whilst on maternity leave?

    There are varying views on this issue, with come commentators stating that payment of a car allowance is a non-cash benefit which should continue to be paid during maternity leave.

    It is our view that car allowance should be treated as remuneration and is therefore not payable to employees on maternity leave. A women's right to remuneration stops during maternity leave and is replaced with maternity pay.

    In support of this position, car allowances are often regarded as uplifts on salary and attract NICs, suggesting that they should be treated as wages, not as benefits. Also, when calculating normal weekly earnings for the sake of statutory maternity pay ("SMP"), any payment that is liable to NICs must be taken into account. Since the employee receives 90% of her normal weekly earnings during the first six weeks of maternity leave, she will in effect receive 90% of the car allowance as part of SMP and will therefore receive more SMP than an equivalent employee who has taken the car rather than the allowance. Maintaining the car allowance as a separate benefit would therefore lead to a degree of double-payment for the first six weeks.

  2. How should employers deal with salary sacrifice schemes for employees on maternity leave?

    The following will apply to all salary sacrifice schemes, including a scheme for the provision of Childcare Vouchers.

    A salary sacrifice scheme may also apply in a car lease situation. For example:

    • Option A: use of cheaper car
    • Option B: salary sacrifice and use of a more expensive car

    Legally, salary sacrifice benefits are contractual benefits and should therefore be paid throughout the duration of maternity leave.

    SMP cannot be sacrificed which means that the employer will need to meet the salary sacrifice cost for women receiving SMP only, throughout their maternity leave. Employers will also need to meet the salary sacrifice cost for women who have exhausted their entitlement to SMP (e.g. for weeks 40 - 52).

    Employers can deduct salary sacrifice payments from enhanced maternity pay provided this does not impact on the level of SMP. Deduction from enhanced maternity pay, however, may result in an inequitable outcome, with an employee who salary sacrifices receiving a smaller overall package than an employee who does not. Maternity policies should be drafted carefully to avoid this outcome.

  3. Should employee-paid benefits in respect of a Flexible Benefits Scheme continue to be paid during maternity leave?

    If the Flexible Benefits Scheme works on the basis of salary sacrifice benefits should be treated as discussed at question 2.

    If the Flexible Benefits Scheme works not on a salary sacrifice basis but by giving employees preferential rates (e.g. reduced gym membership rates where payment is made by the employee to the gym) this should not be affected by the employee being on maternity leave. The employee can choose to continue the payments but the employer is not obliged to pay the benefit on behalf of the employee.

    If employee and employer-paid benefits are linked (e.g. the employer will make a contribution of 0.2% of salary provided the employee makes a contribution of 0.1%) and the employee chooses to discontinue their contribution during maternity leave the employer is entitled to also stop their contribution. An example given by one of the participants of such a situation was with regard to healthcare.

  4. Must employers continue to pay Give as You Earn (GAYE) contributions on behalf of employees during the course of their maternity leave?

    Donations made under a GAYE scheme do not tend to be made as part of a salary sacrifice arrangement although they are tax allowable deductions. The effect of GAYE is that the employee chooses to make a donation of a certain amount but the amount deducted from their salary is less due to the tax benefit e.g. the employee chooses to make a donation of £5 per month but the amount deducted from their salary is £4. This is a cash benefit and there is therefore no requirement for the employer to continue to make the payment during maternity leave.

  5. Are employees entitled to receive commission in respect of the period when they are on maternity leave?

    No. Commission is considered remuneration for the purposes of the maternity legislation. A woman's right to remuneration stops during maternity leave.

  6. Do women on maternity leave accrue annual holiday during the whole period of maternity leave? Can the employer stipulate when this accrued leave must be taken by? Can the employer ask the employee to take their full accrued leave entitlement at the end of maternity leave?

    Women on maternity leave should accrue both statutory and contractual holiday throughout their maternity leave.

    An employer can stipulate when the accrued leave must be taken by and the employer can ask the employee to take their full accrued leave entitlement at the end of maternity leave.

    Where an employee takes 52 weeks maternity leave the employer should consider rolling over some or all of accrued annual leave into the next holiday year. There is currently no obligation to do so however.

  7. Are employees entitled to accrue public holidays for the period they are on maternity leave?

    This is a grey area. If an employer's policy previously allowed employees to accrue public holidays during OML, it would be consistent to extend this throughout additional maternity leave AML.

    Employers implementing such a policy could consider removing this entitlement altogether however. It is our view that employers are not required to allow employees to accrue public holidays during maternity leave, if the public holidays are additional to the minimum statutory entitlement. As explained at question 5 employees are entitled to accrue their minimum statutory entitlement throughout their maternity leave.

  8. Does an employee whose baby is born prematurely but had an Expected Week of Childbirth ("EWC") after 5 October 2008 fall under the New Maternity Rules?

    Yes. The New Maternity Rules refer to the EWC rather than the actual date of birth of the child. An employee is required to inform her employer of her EWC 15 weeks before the EWC. Employers should use this date when determining whether or not a woman falls under the New Maternity Rules.

Catriona Aldridge
Dundas & Wilson CS LLP

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions