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statutory maternity pay

First-up, this isn’t clickbait. 


I’m not here to polarise opinions just for engagement. I don’t care about vanity metrics, I just genuinely want to understand this topic more and ever since I sat down to write my first ‘novel’ at 7, I’ve been processing information and forming opinions by writing them out and then debating them. 


Humour me a little and engage in the debate or choose to ignore me entirely - either way, I’m not beating a path to being a cut-price Katie Hopkins, I just might have a different opinion to you. 


Why am I even talking about statutory maternity leave?


I don’t have kids, I’m never having them, so I’ve never paid much attention to a company’s maternity/paternity/parental leave policy. That changed when I started to think about bringing on full-time employees for my own business. Until now, I’ve been running this company in various forms since 2019 with only the help of contractors and freelancers.


I love contractors and freelancers (I am one myself, so it would be a little weird not to), but there are limits to what they can offer to the business.


There’s the idiosyncrasies of IR35 to consider when ramping up an agreement with a freelancer, I can’t offer them holiday or sickness pay, nor can I 100% determine when and where a freelancer is working for me. I can’t always dial up a freelancer’s work when I need to and it’s harder to balance emergency client needs because of that. 


statutory maternity pay


As I start to take on too much work for one person to handle, I’m finding myself in need of a full-time hire. I want to be a considerate and supportive employer, a Founder who understands that my team doesn't give anywhere near as many shits about my company as I do, someone who understands that life isn’t just about work and who puts systems in place to protect that understanding. 


But I don’t think that, for me, that includes giving out generous parental leave allowances. 


What actually is Statutory Maternity Leave?


I currently work exclusively in the UK (quite honestly because I can’t be bothered to faff about with international tax rules) and so this part is specific to UK laws. I’m also focussing on standard maternity pay, rather than statutory allowances for other types of pay relating to becoming a parent, such as paternity or adoption pay, or any special circumstances because this isn’t a guide to what an individual is entitled to. Find anything you need via the HMRC Website


In the UK, to be eligible for statutory maternity pay (SMP) in the UK employees must meet certain criteria. If those criteria are met, then a qualifying employee can take up to 52 weeks of maternity leave. 


In terms of the actual amounts paid, SMP for eligible employees can be paid for up to 39 of those 52 weeks, usually as two phases. 


How much does statutory maternity/paternity pay cost an employer?


Statutory Maternity Pay can be reclaimed from the government (any additional maternity leave that you offer cannot). A company can usually reclaim 92% of employees’ Statutory Maternity Pay, (as well as Statutory Paternity, Statutory Adoption, Statutory Parental Bereavement and Statutory Shared Parental Pays). 


Interestingly, if you’re running a small business, it’s worth noting that you can reclaim 103% if your business qualifies for Small Employers’ Relief.


These figures are amounts that you can reclaim - i.e. you’ll offset them against any other liabilities due to HMRC - but there are provisions in place to protect your cashflow via advance payments if your business doesn’t have sufficient liquidity. 


In short, aside from some potential cashflow issues, which can easily be overcome, in the UK, statutory maternity pay can cost an organisation relatively small amounts. 


Not so much the case with more generous policies. 


How much does a more generous maternity pay policy cost?


Commonly known as ‘Enhanced Maternity Pay’, there are no set guidelines for what a policy that’s more generous than statutory looks like. Per Pregnant Then Screwed, two thirds of UK companies offer an enhanced policy and the most common form for this to take is something in the region of full pay for 12/13 weeks, followed by standard rate SMP for the next 23/24 weeks. 


I’m a pretty finance-forward COO and I’ve worked with a lot of early-stage Founders who just don’t enjoy financial planning, so let me break down the maths for you. 


The median UK salary is around £35,000 at the time of writing. 


Purely thinking about the costs of their salary, not other costs to the business like finding and training a replacement, if you were to offer SMP only and you could claw back only 92% of that, each eligible employee’s full maternity period at the median UK salary would cost your company just under £815, or an average of £21/week for the 39 weeks. 


If you were to offer the basic enhanced package given above, that would rise to just over £6,500 per eligible employee, or an average of about £170/week for the 39 weeks. 


If you have a more senior employee, e.g. someone taking home a salary in the high five figures, SMP would cost your business £1,340 (£35/week) per eligible employee and EMP would come in at just over £16,300 (420/week).


statutory maternity pay

Why wouldn’t I want to offer enhanced maternity pay?


I love people, I love their choices, and I love the whole expanse of personal beliefs (the ones that don’t include intrinsic harm to others, at the very least). I love that I live in a country in which reproduction continues to be, legally, a choice (though I don’t love that two Conservative MPs - one a woman - recently worked very hard to amend the UK’s Criminal Justice Bill to further restrict access to UK abortion care, despite the evidence-based objections from Foetal Medicine Specialists). 


In short, I support your choices and the decisions that you’ve made for your own lives. They’re not always the same as my choices but that is completely irrelevant. You do you, boo. 


But they are choices. Having children is a choice. It’s a choice that’s protected in law and promoted by society to such an extent that it wasn’t until my mid-30s had properly turned into my late-30s that people started silently doing the reproductive maths and stopped telling me ‘Oh, you’ll change your mind when you meet the right man’ in response to me mentioning my perfectly valid desire to never have children - a desire I’ve had since I was a child myself.


If I were to say to another woman ‘Oh, you’ll change your mind’ in response to her desire to have children, I’d be shunned. One choice is accepted by society at large, the other is often seen as leaving me somehow unfulfilled, unfinished; it’s impossible for that to be the truth of my life. Which is what makes this next bit quite frightening to say.


I have chosen not to have children and that's ok. I also choose, as an employer, not to pay more than is legally required of me for other people to have children. I don’t hate people who have children, I don’t hate the children themselves. I’ve happily bought baby shower gifts and first birthday gifts and new jumpers for school. I’ve babysat for hours and I’ve wiped more than my fair share of mystery goo off of my clothes. I may not want my own, but I believe, passionately, that the children that do exist should be given as much education, healthcare, support, and love as possible.


Having and raising kids looks hard, really hard. It's one of the reasons I don't want them. But it's not the only hard thing; all of us have something going on. Some of us (like me) are disabled, some have ageing parents, some of us are studying or working side hustles that fulfil us. And, yes, some of us need support because there are kids in the picture.


I’m choosing not to invest heavily into enhanced maternity pay because I want to use that money to support everyone’s non-work needs and create an environment that honours the individual - regardless of their choices.


Parental Pay policies are the only type of additional benefit that costs a business a significant amount of money and are subject to an employee's personal choice. I’m not refusing them because I’m obsessed with keeping all the money for myself - I always pay the team before I pay myself (and, quite frankly, if all I cared about was money I’d have stayed at Amazon and been miserable for years).


I also absolutely appreciate that this means that my company won’t be a suitable environment for some employees who want to take more time off work after having their children and can’t afford to do so without enhanced maternity pay. I have chosen that for the company, much as they have chosen the opposite. I would not, ever, discriminate against someone for having children, but I don’t believe that that means that I have to pay for it. 


Are you still reading? I feel like I've really over-explained my choice here, but all my choices relating to children are ones I've been having to defend for years and not being emphatically pro-parent feels like a bit of a taboo. And not the sexy Tom Hardy kind.


What would I offer instead of enhanced maternity pay?


As I mentioned in the introduction, I aspire to be a Founder who understands that my team doesn't give anywhere near as many shits about my company as I do, to be someone who understands that life isn’t just about work and who puts systems in place to protect that understanding. 


So, what systems do I want to put in place, if not enhanced maternity pay?


  • 9-day fortnights, ideally moving into a 4 day working week at the absolute most. As someone with a business that’s entirely based around helping companies get more shit done, I run a pretty efficient ship myself. I’m certain my team and I can get a great amount of work done in 4 days per week and I’d like to spend the money I won’t be investing into EMP on everyone having at least every other Friday off, including the parents. 

  • A bigger annual leave allowance for everyone. Statutory leave in the UK is 5.6 weeks for full-year workers, with 4 of those weeks being at a ‘normal rate of pay. That’s about 2 days per month - I’d like to spend the money I won’t be investing into EMP on making that larger for everyone, including the parents. 


  • Sabbaticals for everyone - there are no statutory rules in the UK about taking a non-parental career break and retaining your job afterwards; I’d like my company to create some for its employees. How that’s structured and paid will be a question for the budgets as the business grows, but, at a minimum, I’d want to look at spending a similar amount on the people not taking parental leave as is legally required to be spent on those people who are. 


  • Work when you want. As long as we're all hitting our deadlines and delivering what our clients need, it doesn't matter to me when asynchronous work gets done. Whether someone needs flexible hours to support their kids or because they just want to go to the gym in the middle of the day, have at it. Just don't call me when I'm taking my 3pm nap.


In summary, I’d like to spend the money I won’t be investing into EMP into creating a more flexible and human-centred working environment for everyone, regardless of their choices. 


What are your thoughts about the policies you have in place or plan to have in place? Need someone to chat it through with?


Book a free call below to talk more. 



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