SMP much higher than enhanced maternity for 6 weeks - employer pocketing difference

[username131024]

Hello

Fortunate position that I would get high SMP due to qualifying period being a bonus period. Employer offers enhanced maternity pay. However it seems my employer pockets the higher SMP and offsets it against 6 months full pay. It means I get much less than SMP for the first 6 weeks, although I get paid more than SMP after that period.

My question is can an employer benefit where an employees SMP is higher than their monthly salary - rather than giving the employee the SMP directly for that initial period. I.e. my employer isn’t topping my salary up to 100% from 90%, they are reducing my entitlement significantly to bring it down to 100% of salary.

Happy to answer clarifying questions.

@IWD23 - I think they may just be paying the SMP over the 33 week period. However they are paying me much less than the 90% SMP for the first six weeks and averaging that amount over the remaining 27 weeks. And calling it enhanced maternity pay which is technically for the later portion but seriously lower than SMP for initial period.

@MidnightPatrol - they are paying me my normal salary. However due to SMP including large commission payment - it’s significantly less than SMP.

@IslandsintheOcean Occupational maternity pay is the top up from SMP. They can only ask you to repay the 10% top up for the first 6 weeks. They cannot average SMP over the 39 weeks.

You are correct they are not paying SMP correctly and you can report them to HMRC.

@IslandsintheOcean

They can't decide when you pay you the SMP amounts and "stretch" it over the 39 weeks. It's a set weekly payment based on your qualifying earnings.

What they are suggesting is fraud.

Please also know they are claiming back most of SMP from the govt so aren't out of pocket for the higher payment, just the enhanced portion.

I am HR/payroll professional and had similar situations in the past. We always paid higher of SMP or base salary for the first 6 weeks.

@IWD23 - I’m going to go back to them to on this. What I’m struggling to find is ultra clear guidance that says exactly what you’ve said - the first six weeks needs to be the higher of SMP or enhanced maternity pay regardless of what happens over rest of SMP period.

My qualifying period coincided with my bonus payment, so my fist pay on maternity was really high. No they cannot pocket, I would speak to hr.

@happypickle - HR and Payroll have said as they pay enhanced maternity period over the six months they are paying more than SMP. I just wanted a slam dunk reference to a case of HMRC guidance on this.

Sense tells me it’s not right but just looking for everyone’s collective wisdom on shaping that rationale to go back to them.

@IslandsintheOcean

Let me see what I can find later. I've never come across this situation before!

Thanks so much @IWD23 - neither have they so clearly it’s not common.

Like @happypickle I have friends who have had bonuses who get the very high SMP and revert to standard salary for rest of enhanced maternity pay period. So it does happen but I’m not sure on what basis other than surely my employer shouldn’t benefit from what is a tax benefit to employee.

@IslandsintheOcean

Nidirect has the exact advice you need, it's clear that they have to pay you the higher smp, but they don't have to pay enhanced unless it's in your contract. You must have received the money as in transferred to your bank account during the qualifying period for it to count

I don’t understand why they think that the enhanced pay for the rest of your leave is an excuse here. If they pay you your normal salary for 6 months then you’re still getting less than if they pay you the full claimed SMP for 6 weeks plus your normal salary for the the remaining time. They’re making money out of you.

The SMP is based on your qualifying period and they can’t change that. They have to pay it to you and then go down to your normal salary for the period once SMP ends.

I hope you manage to get the right way to tell them from this thread and from maternity rights helplines. Your employers are trying to pull a fast one!

@mitogoshi - could you link me / quote the direct para?

@WarshipRocinante - yes that’s it. They’re making money from the improved SMP position. Which seems counter intuitive. If I didn’t get the commission it would cost them thousands more.

Are they also saying that this 'enhanced' maternity pay is conditional, that you have to pay it back if you don't return?

Hi @MoreDangerousThanAWomanScorned - they’re being nice and offering to confirm the total amount of SMP isn’t repayable ie almost all payments for period. It’s laughable as of course it’s not repayable - and you’re paying it to me months late while not actually paying me any enhancement.

@IslandsintheOcean
“3.9 SMP amountIf you satisfy all the conditions you will be entitled to SMP for a maximum period of 39 weeks.
The amount you get depends on your earnings. The first 6 weeks of SMP are earnings related and you will get a weekly rate equal to 90% of your average weekly earnings (there is no upper limit). The remaining 33 weeks are paid at the weekly standard rate SMP of £139.58 (from 5 April 2015) or the earnings related rate if this is less than standard rate SMP.”

This is an extract of the gov.uk guidance I linked to.

@IslandsintheOcean I'm sorry, I didn't have time to search for this today.

But a couple of things you could do: I would call ACAS, Pregnant then screwed and Maternity Action helplines to see if they can provide advice. Also consider phoning HMRC directly. You may also be able to find an employment lawyer who can assist, they are likely to offer a 10 min instruction phone call and may be able to respond immediately. If they know it's not allowed and can quote the relevant laws it may be worth the £500 for a letter to send to your employer, OR, you can notify your employer you will submit a claim to the employment tribunal if they go ahead and prepare it yourself should the time come.

Secondly, I would ask your employer to share their research which says they CAN do this. It's sooooo against the norm that I genuinely can't believe they are even considering it. I would never do it off my own bat; and as someone in my profession I would refuse to process the request if I was ever asked.

@Harassedevictee & @IWD23 - thanks that’s really helpful. I’ll take time tomorrow to seek advice and decide on approach. Agree that getting an employment lawyer might be very helpful. I’ll update this thread if I get a definitive answer.

Inhad a bonus baby. I received the ridiculous extra amount foe the first 6 weeks. Then my enhanced pay for the remainder.

From memory, our policy said something like that I would be paid SMP and the company would increase ad necessary up to the equivalent of my regular pay.

I thibk what your company is doing is totally unreasonable and you should take it further. The reason for smp to be calculated taking sales commissions etc into account over 3 months is to help women where salaries are erratic or when bonuses or sales bonuses are erratic and/or essential.

For an update - I called Pregnant then Screwed - advisor was super helpful but said it seems unfair and worth testing at tribunal - but didn’t have clear guidance. It’s not a common problem! I then phoned the HMRC statutory payments line. They were super helpful, can access your account and report entitlement immediately. They were clear SMP needs to be paid at the agreed rate within the 6 week period (during your usual pay dates). Companies cannot pay it over a longer period.

The next piece of the puzzle is how our enhanced policy applies / if there is another way they can offset it / contractual position. I’ll probably need additional legal advice and PtS have offered an hour of free legal support.

Thanks for all the steers in the right direction & encouragement.

How often do you get commission paymentS? I assume that while you're on mat leave, you will be missing out on those. So this is why SMP is calculated the way it is.

What does the actuall mat leave policy say because it seems to me that it will say something like, "SMP, topped up to meet your usual pay" in which case, they have to give you all the SMP you're entitled to under the calculation and top up if necessary.

Hi @GerbilsForever24 - yes it is clear I now get all the SMP with no cap. What I think might happen is the cap moves to the payment of the additional company maternity payment - the enhanced portion - so they may say in aggregate our policy is you won’t get more than 6 months salary. They take off the SMP amount and pay me the balance. This leaves me worse off as I don’t receive full pay for each of the 6 months (as it’s offset). I don’t have the definitive position. Again as I go I’ll work it out I’ll advise.

What is clear is that on the SMP front - it should be clearer online and from other sources that to pay less than the 90% of SMP over that 6 week period is in breach of the legislation. Everyone knows instinctively it’s wrong but no slam dunk reference (but again harder to prove a negative).

If they have an enhanced mat pay policy then that’s that. If your contract says 6 months full salary then it’s 6 months full salary. They don’t need to offset it. They have to give you all the SMP for these 6 weeks then pay you the SMP plus top up to make your regular salary for the next 6 months. They can’t decide not to just because they can’t find a way to offset it.

They’ve chosen to offer enhanced mat pay, so they have to pay it. They can’t decide that you don’t get it because they can’t find a way to sneakily get it back.

It doesn’t matter that you’re getting extra for 6 weeks. Your contract doesn’t say that for 6 months, they’ll ensure your total mst pay doesn’t exceed 6 months of your salary. It says SMP for 6 weeks then SMP plus top up to full salary.

They have to give you the 6 weeks at whatever the government have calculated it at then they have to follow their policy of a monthly payment equal to your usual salary.

This would be an interesting tribunal. I hope you take it all the way if they try and wiggle out of paying.

Just as a heads up that there is a cap on the 90% 6 week. If I’m correct it might be 3k a month or there about. So for example you can get max 4.5k in the 6 week period.

You need to find that exact number because I can’t remember sorry. But 100% there’s a cap.

@IslandsintheOcean That additional info is useful but awful.

SMP is Statutory and must be paid exactly as set out by HMRC.

OMP is contractual and that varies from employer to employer. They can add additional criteria and pay what they choose as long as it is follows your contract.

I can believe there isn’t case law to cover your exact contractual terms. What you need to do is have an employment lawyer look very carefully at your contract and policy wording. A key part is the exact wording they use to describe your 6 months OMP.

As I now understand it you will be paid 9/10ths of your actual earnings during the qualifying period for the first 6 weeks then 33 weeks SMP.

Your employer will top up your first 26 weeks (6months) using your average base pay rather than your normal remuneration. This is a cop out but may be what their policy states.

You could look at holiday pay case law to see if there is any cross over, as I know variable pay like yours was one of the cases.

This isn't true, I'm sorry. There's no upper cap on the first six weeks of SMP.