Furlough and rights to parental leave and pay

The government’s Coronavirus Job Retention Scheme (the furlough scheme) interacts with rights to parental leave and pay.

An employer cannot reclaim any statutory parental payments (SMP, SAP, SShPP or SPP) under the furlough scheme. There are already separate arrangements in place to do this.

An employee can only be furloughed by agreement with the employer.

The published government guidance says that an employer can claim under the furlough scheme for enhanced contractual maternity, adoption, paternity and shared parental pay. This suggests that employees can agree to be furloughed while remaining on maternity, adoption or shared parental leave.

The guidance also says that statutory payments for employees who start their maternity, adoption, shared parental or paternity leave after being furloughed on a lower wage must be based on their normal wages, that is, before any reduction.

However, this applies only to furloughed workers. Anyone whose wages were reduced due to sickness or reduced hours will have their SMP calculated based on the reduced wage, even though the wage was lower due to the Coronavirus. The employer can agree to pay contractual maternity pay based on normal wages for these workers.

The position is complicated, unclear and subject to change. The best source is the website of charity Maternity Action, where there is a set of FAQs on how furlough affects rights to parental pay.

https://maternityaction.org.uk/covidmaternityfaqs/furlough

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme