Understanding Changes to Statutory Payments

Effective April 2007 the British government passed a bill requiring a number of changes to statutory payments. The main purposes of the bill and new regulations are to:

• Extend the maximum period for which statutory payments are payable from 26 weeks to 52 weeks. The initial change to the regulation specified a period of 39 weeks starting in 2007. However, the intention of the bill is to increase payments to 52 weeks over the next couple of years.

• Allow a number of Keeping in Touch days without the loss of any SMP.

• Introduce an any day start for all maternities.

• Allow employers to provide daily payments, although it would be left to the choice of the employer.

In response to these changes, PeopleSoft has:

• Delivered the SPP Adoption Statutory Entitlement (SPPA VR STAT ENT) and SAP Statutory Entitlement (SAP VR STAT ENT) variables with the Via Elements check box selected on the Variable Name page (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Variable Name).

• Delivered a new bracket for ABS Entitlement Rates (ABS BR STAT ENT). See the Bracket Name component (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Brackets).

• Delivered a new variable for Expected Placement Date (GBR_VR_EPD). See the Variable Name page (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Variable Name).

• Delivered a new variable for ABS Daily Payment for Individuals (ABS_VS_DAILY_IND). See the Variable Name page (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Variable Name).

• Modified the UK Absence Event Junior View (GBR AR ABS EVT JR). See the Field Map and Keys page (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Arrays, Field Map and Keys).

• Created a new accumulator for the Absence Daily Indicator (ABS_AC_DAILY_IND). See the Accumulator Name page (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Accumulators, Accumulator Name).

• Created a new field on the Absence Entry - Adoption Dates page called Expected Placement date.

For SMP, SAP, SPPB and SPPA, PeopleSoft changed the way the entitlements are stored. We now deliver the entitlement values in the ABS Entitlement Rates bracket (ABS BR STAT ENT). See the Data page in the Bracket Name component (Set Up HCM, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Brackets, Bracket Name).

The variables that used to hold the entitlement values are now populated through this bracket. The entitlement value is retrieved as of the expected date of child birth (due date) for SMP and SPPB, and as of the expected placement date for SAP and SPPA.

The expected placement date was added for input within the Absence Event GBR component (Global Payroll & Absence Mgmt, Payee Data, Maintain Absences, Absence Event GBR, Absence Data), and can be found by clicking the Adoption Dates link from the Additional Information page.

By mutual agreement between the employee and the employer, employees may work up to 10 days during the statutory leave, without losing the benefit of their statutory payment. If further days are worked, they lose it for the week.

KIT days may not be taken in the first 2 weeks after childbirth, as the law prohibits a woman from working during this period. Such days do not extend the period of maternity pay or leave.

When an employee returns to work after having used all of their 10 KIT days, you must manually stop the absence and then restart it once this period is over so that statutory payment is interrupted.

Current law states that any MPP where the due date is on or after Sunday April 1, 2007 may begin on any day of the week, rather than starting on Sunday, with the exception of an early birth or pregnancy related illness. When there is an early birth or PRI, the MPP must still follow the current rules.

For example, the maternity pay period would start on the day after the date of birth, or on the day after the first full day of sickness. As such, PeopleSoft has extended the logic that applied to early birth or pregnancy related illness to all maternities.

The system calculates statutory maternity, adoption and paternity pay as a weekly benefit. This remains unchanged. PeopleSoft, however, has been made changes to allow the calculation of a daily rate, which is considered one seventh of the weekly rate.

Although the calculation must always take into account full weeks only, the payment may be split to accommodate the normal payment frequency. For example, for a monthly pay frequency, 3 days may be paid in the first month, with the remaining 4 days are paid in the second month.

PeopleSoft has reviewed the statutory payment calculation to allow daily payment of the weekly rate, which is one seventh of the weekly rate being paid daily. If you wish to take advantage of this new amendment, PeopleSoft has added a new check box called Daily Payment on the Additional Information page within the Absence Event GBR component. When you select this check box, the system makes payments on a daily basis.