Employers face higher maternity pay costs

Businesses paying maternity benefit will face higher costs and more red tape after a new ruling by the European Court of Justice.

According to the Financial Times, the ruling in Alabaster v Woolwich Building Society will require businesses to recalculate maternity benefits to include the full impact of any company-wide pay rises during maternity leave.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Phone

This field is for validation purposes and should be left unchanged.

Δ

The benefit of any increases would be back-dated to cover the first six weeks of leave, when payments are based on average earnings – even if the rises for other workers took effect after this period.

Last week the government proposed changes to increase paid maternity leave from six to nine months as well as pland to extend fathers’ rights.