Should you offer occupational maternity pay to your staff?

Statutory Maternity Pay (SMP) is what you need to pay your staff while they're on maternity leave.

But should you pay more than the legal minimum?

You could enhance the amount you give new parents with occupational maternity pay. But what is it? And should you offer it to your staff?

Let us explain.

What is occupational maternity pay?

You might know it as enhanced maternity pay or contractual maternity pay.

It's an optional payment that you choose to give your staff on top of SMP. And just like SMP, you pay it for a set amount of time.

Usually, you give staff occupational maternity pay under the condition that they return to work after maternity leave.

But this isn't the only condition you could enforce.

You might only let your staff qualify for additional pay after a year of working for you. You could also state that your staff have to repay all or part of the money if they don't return to work.

Whatever you decide, put your occupational maternity pay scheme terms in your employment contracts. This will help your staff understand the scheme and acts as a reference document to help with queries in the future.

How much is occupational maternity pay?

There's no set figure of occupational maternity pay entitlement. The amount you give your staff is up to you. However this must be more than the current rate of statutory maternity pay.

You don't have to make a fixed payment, either. You can give your staff a combination of their full pay and half pay.

Here's how you could divide occupational maternity pay:

• Full pay for the first eight weeks.

• Half pay for the next 10 weeks.

• SMP for the remaining 21 weeks of the paid period.

You could even give staff a return-to-work bonus as an extra incentive.

Should I offer occupational maternity pay?

When considering offering occupational maternity pay, it's important to think about the costs. Of course, it would be nice to support your staff on their new journey but it will cost you. Having budgets in place for these types of pay will ensure you can cover what you offer.

Paying your staff more than the legal minimum could put a strain on your business. Especially if two or more eligible employees go on maternity at the same time.

But, there are benefits to introducing your own occupational maternity scheme. If you enhance your staff's maternity benefits, they're more likely to want to stay working for you once their maternity leave ends.

The benefits of introducing OMP to your business

Improve staff retention rates: They'll feel a sense of loyalty towards you, which could help with staff retention. When you keep committed and valuable staff working for you, it saves you from needing to replace them.

Attract top talent: Working parents or those considering joining a company where they know they will feel supported if they make the decision to start a family may be drawn to your open roles. Bringing with them skills and expertise to support the growth of your business.

Higher Return-to-Work Rates: Often the cost of childcare and the expenses required to raise a child lead to high rates of new mothers choosing not to return to their previous roles. Either seeking a new job elsewhere or taking extended leave to avoid childcare costs. But by offering OMP and supporting new mothers financially while on maternity leave you may see an increase in return to work rates.

To enhance the support your offer new parents, you could combine OMP with other benefits to support new parents in your business. Flexible working contracts and the offer of subsidised childcare and just some examples of how you can support working parents.

Get the support you need from expert HR advisors

At BrightHR our employment law experts and HR advisors offer round-the-clock support to employers. The team can help you handle leave and absence queries, supporting you throughout the process and offering advice regarding your employment contracts, all while staying compliant with current employment laws in the UK.

Book a free demo today to discover award-winning HR software and more from BrightHR.