Should I offer my employees enhanced maternity and paternity pay?

A recent survey conducted by XpertHR found that a majority of UK employers offer enhanced maternity and paternity pay to their employees. Our Employment Law team discusses some of the benefits and drawbacks of offering enhanced maternity and paternity pay to employees, as well as additional benefits you can offer to your employees who are new parents.

Benefits of offering enhanced maternity and paternity pay

Enhanced maternity and paternity pay encourages new parents to take more time off work to bond with their child and be with their family. This benefits you as an employer by increasing your employees’ goodwill, making them more likely to return to work after their period of leave. Enhanced maternity and paternity pay therefore helps your retain experienced and talented employees.

Offering enhanced maternity and paternity pay shows that you care about your employees’ wellbeing, which may make your company more attractive to a diverse workforce, and more competitive for recruiting the best talent. Enhanced maternity pay can also be an effective tool in encouraging more women to apply to your organisation, thus making your workplace a more diverse and inclusive place.

Drawbacks of offering enhanced maternity and paternity pay

Some employers may be hesitant to offer enhanced maternity and paternity pay because of the increased cost. You will need to calculate whether offering enhanced maternity and paternity pay for any period of time is something your business can afford. If the cost would be too great, there are alternatives to enhanced pay you can offer your employees, listed below.

Employers who offer enhanced maternity and paternity pay may feel obligated to extend this to other forms of family leave such as adoption leave and shared parental leave. There is currently no statutory requirement to treat all types of family leave the same, and past Court and tribunal decisions have found in favour of employers who offered different levels of pay for different forms of family leave. However, there is still the possibility that an employee who is not entitled to enhanced pay will file a discrimination or equal pay claim, and different levels of pay are almost certain to create discord and resentment. It may therefore be safest to offer the same level of enhanced pay for all forms of family leave.

There is also the possibility that employees who are not parents end up feeling resentful, or believe that new parents are receiving preferential treatment. To help avoid this, you should ensure that all employees are able to take advantage of flexible working (where feasible) and that there is sufficient coverage for employees who are away on family leave so that the remaining employees are not overworked.

If you decide to offer enhanced pay

If you decide to offer enhanced maternity or paternity pay you will first need to decide how much you can afford to offer.  Some employers offer full pay for up to six months of maternity leave, but you do not need to offer as much. Your maternity and paternity leave policies should indicate the amount of enhanced pay you are willing to offer and state any additional conditions employees must meet to be eligible. For example, some employers require employees to return to work for a set period of time after their leave has ended. You should set out any additional conditions and explain that employees may have to repay any enhanced payments over and above their statutory entitlement if those conditions are not met.

You should also review your employment contracts and make sure they include enhanced maternity and paternity leave as a form of paid leave, and state that you may amend or withdraw the enhanced pay at any time.

Alternatives to offering enhanced pay

If your business cannot afford to offer enhance maternity and paternity pay, there are alternative benefits you can offer to support new parents including:

• Paid time off to attend antenatal appointments with their pregnant partner;
• Gifts before the employee goes on leave;
• Salary sacrifice scheme for childcare;
• Paid time off for dealing with emergencies regarding their dependents;
• Flexibility around working hours or allowing the employee to work remotely;
• The opportunity to return to work part-time.

If you have questions about your employees’ family leave entitlements, or how to calculate family leave pay, contact our Employment Law Team today on on 023 8071 7717 or email employment@warnergoodman.co.uk.

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ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.