Parental Leave Needs To Be Brought Into The 21st Century

Good flexible working is the Holy Grail for many people these days and they are prepared to be very creative to get it.

For some years now working mums have been one of the fastest growing demographic groups for freelancing, franchising and self employment. Surveys show a huge appetite for self employment. Dads too are increasingly going self employed for childcare reasons, although still not to the degree of mums.

It’s not just self employment, though. Many parents are flexing around several different jobs in order to pay the bills, reduce childcare costs and see their children more.

Widespread changes to the ways we now work have happened fairly quickly, enabled by technology. As the recent Taylor Review on Employment Practices in the Modern Economy found, legislation has not kept up with those changes.

In the old days going freelance was sold as giving you not only freedom to work when and where you wanted, but providing a higher income to make up for the lack of benefits such as holiday pay and sick pay.

That is not the case any more. Many freelance or gig jobs don’t pay more so you end up losing out on employment rights for no real return apart from flexibility. And if you need to work all the time to make ends meet, that kind of limits the whole work life balance thing.

Dads are particularly badly affected because of the lack of anything similar to Maternity Allowance for those who are self employed or who aren’t otherwise eligible for statutory paternity pay. The majority take no time off because they are not eligible or for other reasons.

Self employment

Meanwhile self employed mums struggle with trying to keep their work going while attempting to squeeze in some time off for maternity leave and find it very tricky to work out what is allowed under HMRC guidelines. It doesn’t help that different advisers often say different things.

Can they work during their maternity leave, mums ask, just to keep the business going so they don’t have to start all over again after maternity leave? The answer is that they can do up to 10 Keeping in Touch Days without losing maternity pay, but any hours they do in any one day is counted as a full day.

On the other hand, and here’s the injustice, women on SMP can take on extra self employed work without losing any maternity pay.

The whole issue of self employment and employment rights has had quite a lot of attention - and rightly so given the rise of gig working and the like.

Organisations who provide advice to working families increasingly get asked questions by people with multiple jobs, who find it hard to believe the way the maternity pay system currently operates. If you do two jobs and both are jobs for which you are eligible for Statutory Maternity Pay you can get two lots of SMP. However, if you do one job where you are eligible for SMP and one where you are only eligible for Maternity Allowance (MA), you can only get one lot of maternity pay. The same goes if you do two jobs which qualify for MA. Given MA is no more than the statutory rate of £140.98 a week, it doesn’t stretch very far even if you have been putting in all sorts of hours on your multiple jobs.

It doesn’t seem very fair. Moreover, the whole push for mums and dads to share their parental leave does not apply to many self-employed parents because they do not have access to statutory Shared Parental Pay.

So what can be done?

Firstly, Government needs to keep more up to speed with the rapid changes in how people work and the implications for rights and benefits. Part of this is to do with clarifying statutory definitions of, and protections linked to, employment status, something which is likely to be delayed until next year at the earliest.

What we have now is a system where many of the lowest paid workers in the UK are getting the least amount of parental leave support. In addition, many in some of the best paid jobs work for companies which provide generous enhanced parental leave policies.

Should the amount mothers can receive in SMP be capped in order to target more money at the lower paid [currently there is no cap on the amount that can be received in the first six weeks] or should it be increased all round? Should we scrap paternity and maternity leave altogether and move instead to the kind of model Aviva launched recently - equal parental pay policies so parents can choose - outside of the compulsory first two weeks - whether the mum or dad takes time off?

We are in a period of great turbulence generally, in the midst of big social and technological changes. That will mean making sure the systems that support people at work need to be reviewed regularly and ensuring we have a parental leave system that works for as many people as possible. In the meantime, a recent report calls for greater clarity about the national insurance and tax contributions the self-employed and “worker” status individuals need to make in order to secure access to paid family friendly statutory support. Forewarned is forearmed.

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