There is an overwhelming sense of dread when the words ‘freelance’ and ‘maternity’ are thrown together. Freelancers have an instinct of avoiding any maternity leave, fearing that they will land in financial troubles – and rightly so.
As the law currently stands, freelancers and contract workers in the UK are not currently entitled to Statutory Maternity Pay (SMP). Instead, the Government provides so-called ‘Maternity Allowance’.
To qualify, a worker must have worked 26 weeks of the 66 weeks prior to the due date, and they would be entitled to a rate equal to 90% of their average weekly earnings up to a maximum of £138.18 a week (source: www.gov.uk).
This allowance is paid for a total period of 39 weeks, during which the person claiming is not allowed to work. However, workers are allowed to attend up to ten ‘Keeping in touch’ days without their payments being affected.
With increased living costs and ‘tight’ state benefits, it is not surprising to learn that many expectant parents are not taking maternity leave for fear of the financial implications. A wage reduction of that caliber (minimum wage for a full-time job is £227.50 per week) would leave most single parents unable to pay rent without a significant amount of savings.
It is a prudent strategy and sound business decision to make sure any employee, contractor or freelance worker is properly categorised, as there are significant penalties and potential pitfalls to mislabeling those whose services you pay for.
According to Government surveys, 1 in 5 employees are back to work in less than 6 months, but 2 in 5 freelancers are back to work in the same time period.
The best way for a temporary worker to weather this period of low income is to prepare for it well in advance. As an employer, suggest advising your contract workers to set aside 10% of your current salary (pre-tax) and make sure you have a sizeable nest egg to support you during your maternity period.
As an employer, there are a number of ways to make sure that your contract worker is more comfortable with taking time off for maternity. Foremost of which would be a specification that their position will be available on their return would ease the transition. A good working relationship from both parties will help in avoiding problems before they arise – as a side-note, if your company makes use of a large number of freelancers, it may be a viable solution to offer a free ‘saving’ service for said freelancers to pay in to each month.
Along with over 13 years experience in the contractor payroll industry, and after spending most of his working life as a financial advisor in the regulated financial services industry, Mike has garnered an extensive network of contacts in the recruitment industry, many of whom trust both him and the One Click Group to handle their accounting. Mike has also been a member of various industry bodies throughout the years, such as the British Institute of Recruiters, in order to champion best practices across the contractor payroll industry.