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ClariCare Limited, Clarendon House, Greenstiles Lane, Swanland, Yorkshire, HU14 3NH. Registered in England and Wales, No: 6520149. VAT Registration No: 931 4291 38 |
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0800 915 5253 |
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Your trusted and reliable childcare voucher provider |
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Update on latest legislation concerning maternity pay and childcare vouchers |
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Employment Law Update 01-Dec-2008 Recent changes to the Sex Discrimination (NI) order 1976 and Maternity and Parental Leave Regulations (NI) 1999 place a requirement upon employers to treat the additional maternity leave period in the same way as the ordinary maternity leave period, with regard to the provision of non cash benefits. This includes childcare vouchers. This means that for babies due on or after 5th October 2008 employers are obliged to continue providing childcare vouchers if the employee is already receiving childcare vouchers, on the day she starts her maternity leave. If an employee chooses to opt out of the scheme before she starts maternity leave, employers are not obliged to provide childcare vouchers. If an employer offers enhanced maternity pay, employees continue to salary sacrifice as normal, ie the employee funds the childcare vouchers out of her own salary, as long as the reduction in salary means the employee does not go below statutory maternity pay levels. Statutory maternity pay cannot be sacrificed, therefore an employee cannot fund the childcare vouchers out of her statutory maternity pay. In this case the employer is obliged to provide the childcare vouchers. Weeks 40 -52 of additional maternity leave is unpaid, therefore an employee cannot fund the childcare vouchers if she has no salary. In this case the employer is obliged to provide the childcare vouchers. The position with tax law has not changed. These changes are due to amendments in employment law. In assessing the implications of these changes employers should consider: n The fact that both male and female employees can avail of childcare vouchers, but these changes affect only female employees n Childcare vouchers do not have to be provided to an employee having her first child, as there will be no agreement in place when she starts her maternity leave n Some women will choose to opt out of the scheme because their reduction in salary means they are better off receiving tax credits n Some women will choose to opt out of the scheme because they do not want to incur childcare costs while they are on maternity leave n The saving the company makes through the exemption of employers NIC for each employee on the scheme, male and female n The benefits of employer-supported childcare including better recruitment and retention of staff, reduced absenteeism and a more motivated workforce
For further information please also see HMRC guidance entitled “Statutory Maternity Leave – Salary Sacrifice and Non Cash Benefits” |
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