Human resource practitioners believe maternity pay is too low

Most humna resources (HR) practitioners believe that statutory maternity pay (SMP) is set at too low a level, according to research by Personnel Today’s sister publication, Employment Review.

The survey of 185 practitioners found that six in 10 (60%) thought SMP should be raised, while just one respondent argued that it was already too high. A further four in 10 (39%) thought it was about right.

SMP has been improved substantially over recent years. Women who qualify are entitled to payment for 39 weeks. Payment is set at 90% of the woman’s average earnings for the first six weeks, falling to £112.75 a week (or remaining at 90% if that is a lower figure) thereafter.

The government originally promised to raise SMP entitlement to 52 weeks by the end of this parliament. But for many women, taking time off work to have a baby still entails suffering a significant drop in earnings.

The survey found that nearly half (46%) of the organisations taking part in the study had made changes to their maternity pay or maternity leave arrangements over the previous 12 months.

Of these, nearly three out of four (72%) had made changes to reflect improvements in SMP, which came into effect on 1 April 2007. The remaining one in four (28%) had introduced enhanced levels of maternity pay or made improvements to existing schemes.

…and six out of 10 employers pay above statutory rate

Most employers (59%) already have maternity pay schemes that offer more than the statutory minimum, the Employment Review survey shows.

Although larger organisations and those in the public sector are significantly more likely to improve on statutory maternity pay (SMP), either by paying at a higher rate altogether, or by paying the existing higher rate for a longer period – a practice that is already widespread among employers of all types and sizes.

The survey found that nine in 10 (90%) public sector employers currently pay more than the SMP requirement to their employees. This falls to 53% of services companies in the private sector, and to 50% of manufacturing firms.

About half of small (51%) and medium-sized (53%) employers pay more than SMP requires, but the figure rises to 78% of organisations with 1,000 or more employees.

Many of the largest employers are public sector organisations, and it seems likely that it is this, rather than the size of the organisation, that accounts for the difference.

Trade union recognition is also a factor, with 72% of employers that recognise a union also offering enhanced maternity pay, falling to just 47% of those that do not recognise a union.

…but there can be strings attached

The survey shows that nearly half (45%) of the organisations that offer enhanced maternity pay expect the woman to repay at least part of it if they decide not to return to work at the end of their maternity leave.

Most commonly, those that attach conditions to enhanced maternity pay expect the employee to return to work for at least three months if they are to escape a penalty.

Two employers in the survey – one a law firm, the other a food retailer – expect women to return for at least a full year after their maternity leave, or else repay elements of their enhanced maternity pay.

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