Furloughed employees, intending to take paid parental or adoption leave, are entitled to statutory pay based on usual earnings

27 April 2020

Any workers who are planning to take paid parental or adoption leave will be entitled to pay calculated based on their normal earnings, as opposed to their pay during furlough.

The Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Work and Pensions (DWP) confirmed in a press release that full earnings will be used for Maternity Pay, Shared Parental Pay, Parental Bereavement Pay and Adoption Pay. This will ensure that any workers who are about to take family-related leave are not being penalised by the fact that they have been placed on furlough.

Ordinarily, entitlement to Statutory Maternity Pay (SMP), and other forms of Parental and Adoption Pay are calculated using an individual’s Average Weekly Earnings (AWE) over an eight-week period. Entitlement to, and the amount of, Maternity Allowance (MA) that is paid out is also dictated by earnings over a 13-week period.

A statutory instrument that was laid before Parliament allows employees who take a period of family-related pay, that commences on or after 25 April 2020, to be assessed on the basis of their full, usual pay as opposed to on the furloughed amount.

The changes have been implemented to ensure that those who take time off work following the birth, adoption or death of a child will not see their entitlement to statutory pay impacted by the outbreak of coronavirus.

Paul Scully, Business Minister, commented:

“Maternity and other forms of parental leave are pivotal times in people’s lives, and they should absolutely be protected from the impacts of COVID-19.

We are supporting workers and businesses in a way never seen before, in response to the unprecedented effects of COVID-19. These measures will ensure those on the Coronavirus Job Retention Scheme continue to receive the parental leave and pay they are entitled to.”

Lords Minister for the DWP, Baroness Stedman-Scott, said:

“At an already challenging time for families, peace of mind that they can rightly take time off and receive their full entitlement will provide much needed reassurance.

Throughout this health emergency we’ve taken unprecedented steps to help those affected make ends meet, and today’s new measures further extend vital financial support.”


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.