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Maternity Leave – Policy and UIF

Recently one of our staff members welcomed a little bundle of joy into the world. Actually, this happened nearly 5 months ago. The reason I mention the time frame, is sadly, like so many other women out there, who suffer a loss of income for 3 – 4 months whilst on Maternity Leave, she is still waiting for her claim from UIF to be finalised and paid out to her.

My question, how can we, as employers do our part to ensure the process of going on Maternity Leave is less stressful to our staff?

No Maternity Leave Policy In Place?

The Basic Condition Of Employment Act Stipulates the Following:

  1. An employee is entitled to at least four consecutive months’ maternity leave.
  2. An employee may commence maternity leave—
    • at any time from four weeks before the expected date of birth, unless otherwise agreed; or
    • on a date from which a medical practitioner or a midwife certifies that it is necessary for the employee’s health or that of her unborn child.
  3. No employee may work for six weeks after the birth of her child, unless a medical practitioner or midwife certifies that she is fit to do so.
  4. An employee who has a miscarriage during the third trimester of pregnancy or bears a stillborn child is entitled to maternity leave for six weeks after the miscarriage or stillbirth, whether or not the employee had commenced maternity leave at the time of the miscarriage or stillbirth.
  5. An employee must notify an employer in writing, unless the employee is unable to do so, of the date on which the employee intends to—
    • commence maternity leave; and
    • return to work after maternity leave.
  6. Notification in terms of subsection (5) must be given—
    • at least four weeks before the employee intends to commence maternity leave; or
    • if it is not reasonably practicable to do so, as soon as is reasonably practicable.
  7. The payment of maternity benefits will be determined by the Minister subject to the provisions of the Unemployment Insurance Act, 1966 (Act No. 30 of 1966).

If you don’t have a policy in place, your first point of reference should be the above. To summarise, let us look at the following points

The employee is entitled to at least four months consecutive maternity leave

  • Meaning, if the employee requests four months maternity leave, she is entitled to four months leave
  • Should an employee request five months or more maternity leave, this will fall outside the scope defined by BCEA, and this is where your company policy needs to specify how you will treat such cases.
  • And, where an employee requests to take less than the four month maternity leave period, she is allowed to, providing, she does not return to work within six weeks of the date of birth (unless of course her doctor or midwife confirms in writing that she is able to)

Just an opinion, where an employee requests to return to work after six weeks of giving birth, or even before the six week period is up, where possible, try to encourage them to delay returning to the workplace too early. I have dealt with a couple of cases in the past, where staff members have returned to work after six weeks, only to find that they were not ready (physically and emotionally) to deal with their workload or, at the same time, deal with the pressures of motherhood and fulltime employment so soon. This inevitably resulted in them taking periods of sick leave to recover, and poor work performance, which is what you want to avoid.

Obviously, this is also open to debate, everyone is different, this employee may recover remarkably well, while that employee may have complications, this employee may operate the switchboard, while that employee may have to lug heavy files around or have a more physically challenging job, all the more to make your life in HR a lot more interesting.

At the same time, any organisation that “pressures” their employees’ to return at the six week period also does their employee a huge injustice. Allow your staff to take the time they deem necessary to recover and bond with their new-born child, and in turn, they will return to work having fully recuperated and will probably be more likely to throw themselves back onto the grindstone as it were, with a smile on their face.

Commencement of Maternity Leave

The employee is allowed to start her Maternity Leave at any point from four weeks before the due date of her unborn child. As part of the process when dealing with your pregnant staff members, ask them to supply you with a letter from their Medical Practitioner confirming the expected date of delivery. Once you have this information at your disposal, you can discuss and plan when she will commence her leave.

My opinion on the above, most employees will advise that they wish to start their Maternity Leave about two weeks before their due date. The reasoning behind this, in most cases, is that it allows them to spend an extra two weeks with baby before returning to work. Some women will push the envelope even further and attempt to work right up until baby makes an appearance. Whatever the case, its best practice to ensure that you have a letter from the Medical Practitioner confirming that she is fit and healthy to work until said date, whether she goes on leave four weeks before due date or four days before.

The exception to the above four week rule is where a Medical Practitioner or Midwife certifies that the employee needs to start her Maternity Leave sooner than later i.e. she will start her Maternity Leave more than four weeks in advance. I think this is pretty self-explanatory, and will occur most definitely when either the expectant mother or unborn child are experiencing complications, or at risk of developing complications. Again, ensure that you receive in writing, a letter from the Medical Practitioner confirming the expected date of delivery and date employee should commence her leave. Another factor more than likely to affect the above and not limited to, is the type of work the employee does. I will go into more detail about pregnancy in the workplace in another blog. However, for reference purposes, note what BCEA advises

When an employee notifies an employer that she is pregnant her situation in the workplace should be evaluated. The evaluation should include:

  1. an examination of the employee’s physical condition by a qualified medical professional;
  2. the employee’s job,
  3. workplace practices and potential workplace exposures that may affect the employee.

If the evaluation reveals that there is a risk to the health or safety of the pregnant employee or the foetus, the employer must:

  1. inform the employee of the risk
  2. after consulting the employee and her representative, if any, determine what steps should be taken to prevent the exposure of the employee to the risk by adjusting the employee’s working conditions.

Maternity Leave Policy Points

When drawing up or reviewing your Maternity Leave Policy, firstly ensure that you meet the minimum requirements of the BCEA. The BCEA does not stipulate that Maternity Leave needs to be paid, therefore if your company’s’ policy is to remunerate your staff whilst they are on Maternity Leave, make sure that your policy outlines how this is calculated and qualifying criteria.

The Maternity Leave Policy should also outline requirements expected from the employee, i.e. The pregnant employee should inform her manager in writing at the earliest possible date of her pregnancy and due date etc. etc.

Also, in the unfortunate instance of a miscarriage or stillborn, advise how the company will treat her leave (remember to keep to the requirements of the BCEA or above)

Advise if it is Company Policy to allow employees to combine Annual Leave with Maternity Leave (a frequent request from experience) i.e. Where Maternity Leave is immediately followed or preceded by Annual Leave.

Payroll & HR Processes for Maternity Leave (Guideline)

  • Ensure that you have a Maternity Leave Policy in place, and that the employee has read and understood it.
  • Acknowledge receipt of her letter confirming her pregnancy and expected due date.
  • Have the employee complete a Leave Form confirming her period of leave and expected day of return
  • Make arrangements to ensure that the employees’ workload is distributed or start processes to hire a temp to replace her for the period of absence.
  • Medical Aid – If the employee belongs to the company’s medical aid, ensure that she understands the timeline to register the new born. Some medical aids cover the child for the month of birth, but thereafter if not registered, the baby is not covered. Include the application to register the new dependant form in her Maternity Exit Pack.
  • Other Contributions – Where the pension or provident fund of your company includes a Group Life Portion, it is vitally important to ensure that these contributions are maintained whilst the employee is on leave. Often, payroll administrators “forget” about the upkeep of contributions when there are “zero” payslips due to the employee being on maternity leave, this could result in the contributions going into arrears, and the employee being left with no cover. The same applies for funeral fund contributions or anything else that covers the employee in the unfortunate case of death or unexpected complications.
  • Leave Accrual Whilst On Maternity Leave – this will continue as per normal
  • Arrears – Where the employee goes on Unpaid Maternity Leave, and in cases where contributions are payable towards medical aid, provident fund, pension fund etc. (and assuming this is your company protocol to accumulate arrears) – your staff member not only returns to work after three to four months having received no income, but now faces paying back the company for the arrears accumulated and paid on her behalf. Suggestion; take the time (and the sooner the better i.e. when the employee first informs you of her pregnancy) to calculate what the arrears value would be, and give the employee the option to provide for this in advance.
  • Tax Year End (Unpaid Maternity Leave) – Remember to ensure that the employees’ tax totals on their IRP5 are correct. No Earnings = No Deductions, so where exactly did you put those pension / provident / medical aid values that fell into arrears? Adjustment payslips will probably be your best recourse to remedy the above.
  • Medical Aid Dependant – depending on how your payroll system handles the new Medical Aid Tax Credit system, make sure that you record the new dependant for correct taxation.
  • Taxation (Unpaid Maternity Leave) – Expect that your employee, on her return to work, will receive little or no taxation in her first month back at work, or perhaps even in the second month (this is dependent on how your payroll system calculates tax as well as other determining factors), but the rationale behind this point is, if your payroll system has been calculating tax based on estimated earnings for the whole year (12 months, 52 weeks or 26 fortnights), and averaging the tax based on these earnings, when the employee returns to work after three or four months, the effect on the tax calculation could be quite substantial.

In the simple example below, the employees’ taxable income is R17,000.00 per month. Her estimated taxable income for the year is R204,000.00 and her estimated annual tax on this income is R28,360.00. On an averaging tax calculation, your payroll system should be deducting around R2,363.33 tax per month (25% tax bracket)

Estimated Tax Before Commencement of Maternity Leave (Employee tax based on the 25% Tax Bracket)
25% Tax Bracket on Taxable Income
March April May June July August September October November December January February Totals
Taxable Income 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 204 000
Tax Deduction 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 28 360

The employee commences Maternity Leave in September and returns to work in January the following year. Due to the fact that she received no income for four months, her actual income for the year has been reduced by R68,000.00 and her estimated annual income is now only R136,000.00, annual tax would thus be R13,040.00 (18% tax bracket). But the employee has paid R2,363.33 x 6 months prior to going on maternity leave – or in other words R14,180.00. Based on the fact that she has “overpaid” her tax for the year, no tax will be deducted in the January and February months, and the employee can expect a tax refund.

Estimated Tax When Employee Returns from Maternity Leave (Employee tax based on 18% Tax Bracket
25% Tax Bracket on Taxable Income  Maternity Leave Period 18% Tax Bracket  
March April May June July August September October November December January February Totals
Taxable Income 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 17 000.00 0.00 0.00 0.00 0.00 17 000.00 17 000.00 136 000
Tax 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 2 363.33 0.00 0.00 0.00 0.00 0.00 0.00 14 180

Prepare all the UIF documentation necessary in duplicate for your staff member to claim her UIF benefits hassle free. Forms may be misplaced / lost by the claims department, and having duplicates will save them the time and hassle of collecting this from your offices.

What documentation is necessary to make claims? (the Department of Labour advises the following)

  • 13 digit bar coded ID or passport
  • Form UI-2.8 for Banking Details
  • Form UI-2.7
  • Form UI-2.3 application Form
  • Medical Certificate from a Doctor, or Birth Certificate of the Baby
  • Form UI-4 Follow up form

Sources: Department of Labour