The question of bonus payments to women on maternity leave is a complex one. Some bonuses are based on company performance and some on attendance. Our brief guide to bonus payments and maternity leave should make things a little clearer.
This is one of the most difficult questions in discrimination law. The answer is that it depends on what basis your bonus is calculated. Your employer may well be justified in reducing a bonus due to your period of maternity leave.
To be clear about this, a woman on maternity leave remains entitled to all of her contractual benefits while she's on maternity leave: apart from those relating to wages or salary that would include a contractual bonus.
Therefore, a woman on maternity leave is entitled to be paid a bonus in respect of:
The time before she went on maternity leave
The two weeks of compulsory maternity leave
The period after she returns to work following maternity leave
A bonus payment must also be made at the time it would normally have been paid had the woman not been on maternity leave, even if that means receiving your bonus while you're still away from work. Employers may reduce a bonus to reflect the period that a woman was absent on maternity leave, except as referred to above.
With all of the above in mind, if your discretionary bonus is based on attendance, your absence on maternity leave might have an impact on the bonus you receive.
Similarly to a contractual bonus based on company performance, if your discretionary bonus is dependent on either your attendance or your individual performance your employer can pro-rate your bonus payment based on your attendance. In other words, any absence on maternity leave other than the first two weeks could affect your bonus.
Having said that, the effects of maternity leave on your actual bonus can also depend on whether your contract says that it must be based on targets, individual performance or the performance of the company overall.
None of this means that your contribution to the business should be overlooked when the company is giving out bonuses for the time you were at work.
Disputing your bonus due to maternity leave is a complex area of law so we would always recommend seeking advice from one of our experienced employment law experts if you find yourself in this situation.
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Frequently asked questions about maternity leave and bonuses
Can you be paid a bonus while on maternity leave?
Yes, though this can be dependent on the terms of your employment contract. If the details of your bonus are included in your contract, it is considered a contractual obligation and you should receive the full amount regardless of your maternity leave.
If your bonus is discretionary (including any bonuses described as such in the terms of your contract), your employer may refuse to pay it, though they may pay a share of the bonus for any time in the bonus period you spent at work. For example, if your employer operates a discretionary annual bonus, and you worked six months of the year before going on maternity leave, they may pay half of the total amount.
Can you earn extra money while on maternity leave?
Yes, you can earn extra money while on maternity leave, though there are conditions.
If you are receiving Statutory Maternity Pay (SMP), you may be able to earn extra money through self-employment without it affecting your pay. Examples of self-employment include selling crafts, providing services such as babysitting, or even some freelance work.
However, it is important to remember that you are still bound by the terms of your employment contract while on maternity leave, so you'll need to ensure that any work you do take on does not conflict with your obligations to your employer.
Unfortunately, if you are in receipt of Maternity Allowance (MA), you cannot take on self-employed work while on maternity leave. You can choose to work up to ten days for your employer, referred to as Keeping in Touch (KIT) days, though any further work would result in you being disqualified from claiming MA for at least the number of extra days you worked.
I am very happy with the service provided which was professional, quick and efficient. I would certainly recommend Slater and Gordon Lawyers should any chance arise. Huge thank you! V K (employment case)
The Manchester Office has been very professional, helpful and prompt when dealing with a settlement agreement regarding my voluntary redundancy. I would have no hesitation in recommending Slater and Gordon for any employment law issue. D M (employment case)
I would 100% recommend Slater and Gordon if you need any help in employment law. They offer an incredible service. H L (employment case)