New amendment regulations have just come just into force. They deal with the calculation of “normal weekly earnings” for the purposes of statutory maternity pay (SMP) and other statutory parental payments where the recipient is on furlough.
Entitlement to SMP and the rate payable depends on an employee’s normal weekly earnings. Normal weekly earnings are calculated as a weekly average of an employee’s total gross earnings from the employer and any associated employers during a reference period (the “relevant period”). For SMP purposes, the relevant period ends with the last normal pay day on or before the end of the Qualifying Week (which is the 15th week before the expected week of childbirth) and begins after the last normal pay day at least eight weeks earlier.
The new amendment regulations provide that where a woman is on furlough during part or all of the relevant period and her pay is reduced as a result, her normal weekly earnings for the purposes of eligibility and the rate payable for statutory maternity pay will be calculated based on the pay she would have received if she were not furloughed (regulation 3).
The regulations make similar amendments in respect of maternity allowance, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay.
The amendment regulations ensure that employees are not disadvantaged in relation to statutory payments as a result of their being furloughed.The regulations apply where the first day of the period in which the relevant payment or allowance is payable is on or after 25 April 2020.
