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.

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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.