Statutory pay: updates for employers

Understanding your employee’s rights is a major part of being an employer. And when an employee becomes sick, is expecting a baby, or is planning to adopt, you must pay them a suitable wage. The rate at what you must pay them, and for how long you pay them, is overseen by the Government. This is known as statutory pay.

Most employers will already be familiar with this concept. But from April 2017, the rate at which statutory pay is paid to out-of-work employees is increasing. To avoid any undue surprises, we’ve listed the new rates below.

Maternity pay

The current weekly rate of statutory maternity pay is £139.59, or 90 per cent of the employee’s average weekly earnings – whichever is lower.

This will increase to £140.98 from April 2017.

Mothers are entitled to 33 weeks of statutory maternity pay.

Paternity pay

The current weekly rate of statutory paternity pay is £139.59, or 90 per cent of the employee’s average weekly earnings – whichever is lower.

This will increase to £140.98 from April 2017.

Fathers are entitled to one or two weeks of statutory paternity pay.

Shared parental pay

The current weekly rate of statutory shared parental pay is £139.59, or 90 per cent of the employee’s average weekly earnings – whichever is lower.

This will increase to £140.98 from April 2017.

Introduced in 2015, up to 37 weeks of leave can be shared by parents if they meet certain eligibility criteria. The rules are fairly complex, and parents can take more time off unpaid if needed. For more information on the shared parental pay scheme, contact one of our payroll advisors.

Adoption pay

The current weekly rate of statutory adoption pay is £139.59, or 90 per cent of the employee’s average weekly earnings – whichever is lower.

This will increase to £140.98 from April 2017.

Parents can take up to 33 weeks of statutory adoption pay.

Sick pay

The current weekly rate of statutory sick pay is £88.45.

This will increase to £89.35 from April 2017.

Employees are entitled to up to 28 weeks of statutory sick pay.

More information

To qualify for statutory payments, an employee’s average earnings must be equal to or more than the lower earnings limit. The current lower earnings limit is £112, increasing to £113 from April 2017.

However, some organisations prefer to set their own leave policy. This is acceptable as long as the minimum term and pay is equal to or more than the Government’s statutory rates.

Katie Hewlett, Payroll manager at Moore Thompson, said: “If you think your company might benefit from introducing its own maternity, paternity or similar scheme, whether to attract new employees or to show that you value the ones you already have, a payroll professional can handle the necessary legal and regulatory requirements.”

Keep track of your legal obligations by visiting www.moorethompson.co.uk. For more information on any of the articles discussed in Payroll, contact one of our payroll & HR experts here.