HMRC, ACAS and BERR (formerly the DTI) have issued new guidance on how salary sacrifice and non-cash benefits should be treated for employees on maternity leave following revised regulations which take effect on 5 October 2008.
The Maternity and Parental Leave Etc. and Adoption Leave (Amendment) Regulations 2008 and The Sex Discrimination Act 1975 (Amendment) Regulations 2008 come into effect for employees whose expected week of childbirth (EWC) begins on or after 5 October 2008.
The effect of these regulations is that there is no longer any distinction between the rights and obligations of employees on ordinary maternity leave (“OML”) and those on additional maternity leave (“AML”).
Employers must keep paying contractual non-cash benefits to employees on OML (as before) and also to those on AML i.e. for up to 52 weeks rather than up to 26 weeks.
Non-cash benefits include:
medical/dental/critical illness etc insurances.
Many companies provide such benefits, particularly childcare vouchers, through salary sacrifice schemes, whereby the employee agrees to vary their employment contract such that their contractual entitlement to cash salary is reduced and a non-cash benefit is provided instead.
The new guidance, titled “Statutory maternity leave – salary sacrifice and non-cash benefits” can be found at