Another new tax year is fast approaching, and the new statutory rates are proposed as follows:
- The standard weekly rates of SMP, SAP, SPP and ShPP will increase from £139.58 to £140.98 – it is assumed this will be for payment weeks commencing on or after Sunday, 2 April 2017. The prescribed weekly rate of maternity allowance (MA) will also increase from £139.58 to £140.98.
- The weekly rate of SSP will increase from £88.45 to £89.35 from 6 April 2017.
- The earnings threshold, below which employees are not entitled to SMP, SAP, SPP, ShPP and SSP, will increase from £112 to £113 per week from 6 April 2017.
The rate increases reflect a 1% increase in the consumer price index (CPI) in the year to September 2016.
This will be the first time we have seen an increase since April 2015. This is because, although the rates normally increase each year in line with the CPI, a 0.1% fall in the CPI in the year to September 2015 meant that there were no rate increases in April 2016.
These rates are subject to Parliamentary approval, so changes are possible, but unlikely.
Because of the struggle involved in balancing business needs and support for working parents, maternity and childcare issues are often in the press.
Proposals to extend statutory maternity pay were recently put forward, from the current 39 weeks to 52 weeks, and to provide 15 hours of free childcare a week for children aged one to four years old.
The idea behind these proposals is to improve incomes and job prospects for working parents, which is often a struggle for employees who are juggling childcare and career progression.
It is not sure whether this will develop into government policy but with a hefty £2 billion price tag, it is certainly a radical idea which will carry pros and cons for both employers and employees.
The positives can be:
- Improved morale for working parents. They should feel more supported by their employer
- Improved reputation for the organisation in its approach to working families. Many job candidates like to see a company demonstrating empathy and support towards its employees
- Less stress for employees planning a family from a financial/career progression perspective. If women know they will receive extended maternity pay, and free childcare, earlier on they will worry less about the financial impact of becoming a parent, and hopefully discard the idea of not returning to work
- Women will be less likely to allow starting a family to affect their career plans
But there also may be negatives:
- Organisations could face workforce planning issues if more women take the full 52 weeks’ maternity leave
- Employees without children could argue they were being disadvantaged because they do not have them
- There may be an increase in pregnancy/maternity discrimination towards those employees benefiting from the increase in statutory maternity pay and free childcare
Out of these, the potential rise in discrimination claims is perhaps the most worrying for an employer as this could be potentially very costly. If this happens then it might be necessary to carry out refresher training on a wide range of equality issues.
Organisations would need to expressly state that all employees should be treated fairly and equally, regardless of their personal life choices, including whether or not to have a family.
Having a checklist to go through with employees before they go off on maternity leave, would be a good idea and should include:
- Confirmation of maternity leave dates
- Clarity on whether the employee will be accessing work emails during leave
- Confirmation from the employee on how she would prefer to be contacted during maternity leave
- Up-to-date phone, email and postal contact details for the employee
- A section that can be signed by the employer and employee to indicate that both parties have agreed to the arrangements