Maternity pay calculation

[Uwila]

My payroll/HR department have just informed me that they made a mistake when caculating my maternity pay and will be extracting the difference from my March payroll.

Basically they say that the money I contribute to the ESPP (Employee Stock Purchase Plan) is not suppose to count as part of the Gross pay they use to calculate the 90% of pay I get for six weeks.

Is this true? If I buy company stock pre-tax (ie don't pay NI on this money) is it them not considered part of my gross pay in calculating my maternity pay.

I'm sooooooo mad. I can't believe they can just say oops sorry. We're taking it back.... NOW!

I've asked them for UK documentation that states their case and I got the following statement for the IR website: "Please find attached Inland Revenue web page stating as one of the conditions for SMP payment that “Employee’s gross earnings attract Class 1 National Insurance contributions. " This does not actually say earning that don't pay NI are disqualified. It just says for employee to be eligable they must pay NI class 1.

Oh PLEASE someone help me.... PLEASE. I have TODAY to convince them they are wrong.

I would argue that SMP is based on gross pay, which is by definition your pay before any deductions regardles of whether these deductions are voluntary (i.e. pensions contributions or share save schemes) or involuntary (i.e. NI or PAYE).

Doesn't seem right so can understand your frustration.

Don't know Uwila but I would call a solicitor that specialises and will give you free advice over the phone.

Why do you only have today to do it? If they are wrong, even if they do this now they would have to give it back surely?
Can't blame you for being mad though!

i am sure that you are right - i used to make a "pay sacrifice" at work for non-taxed pension contributions, and i got paid smp on my gross pay.

as they get 92% back from the govt, i'm amazed that they would be so bothered about getting it back. am also not at all sure about the legality of taking it back.....which is a roundabout way of saying 'bump"

But have just done a quick scout about on the Web it appears SMP isn't based on gross pay but on average earnings over an 8 week period, where average earnings are defined in the same way as those upon which you pay Class 1 NIC.

I have today to sort it out because they will run payroll globally tomorrow to go into everyone's bank accounts on the last day of the month. I work for a HUGE company. They will do as they see fit and it will be up to me to sort it out later. And if they take this money I will not be able to pay my bills next month. Our financial year ends this month and so it will run tomorrow or monday.

Oh Gomez, that sound like they are right. Where did you find that? Could I have a link please.

This might help

\link{http://www.eoc-law.org.uk/Default.aspx?page=2988#Statutory_maternity_pay\smp info}

Does look like they are right thou'

Lookey here. \link{http://www.dwp.gov.uk/lifeevent/benefits/ecj_judgement.asp\raise}I got a raise in April. Although it was unfortunately much less than the amount they want back.

Cool - you might be able to limit the damage then.

I hate the payroll department. It's located in Dubai a staffed with idiots (who are presumably cheaper than the people who worked in the department here in the uk before they decided to move to Dubai).

And another thing, if parents get the £50 vouchers, does this mean that part of their income doesn't count towards maternity pay? That's crap. Of course my company doesn't give vouchers so it doesn't matter in my case.

But, this is stupid!