Holiday Pay During Maternity Leave

Introduction

Holiday pay during maternity leave is a key area of employment law that often causes confusion for both employers and employees. Many individuals assume that annual leave stops accruing during maternity leave, or that it must be taken before leave begins. In reality, the law in England and Wales provides strong protections for employees on maternity leave, including continued holiday entitlement.

At Blackstone Solicitors, we regularly advise on disputes involving maternity rights, including holiday pay calculations, carry over of leave, and pay in lieu on return or termination. These issues can become complex quickly, particularly where long periods of maternity leave are involved.

This article explains how holiday pay works during maternity leave, what rights employees have, and what employers must do to remain compliant with employment law.

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Do You Accrue Holiday During Maternity Leave?

Yes. Employees continue to accrue statutory annual leave while on maternity leave.

This is a fundamental protection under UK employment law. An employee’s contract of employment continues during maternity leave, even though they are not actively working. Because of this, statutory holiday entitlement continues to build.

This applies to:

• Ordinary maternity leave
• Additional maternity leave

The full statutory entitlement of 5.6 weeks per year continues to accrue in the normal way.

How Much Holiday Do You Accrue on Maternity Leave?

Employees are entitled to 5.6 weeks of paid annual leave per year under the Working Time Regulations 1998.

This entitlement does not reduce because of maternity leave. Instead:

• Holiday continues to accrue during the entire maternity leave period
• Both statutory and contractual holiday may continue to build
• The total entitlement may increase significantly during long absences

For example, an employee on a full year of maternity leave will still accrue their full annual holiday entitlement for that year.

Can Holiday Be Taken During Maternity Leave?

Yes, but it is not compulsory.

Employees can choose to take annual leave either:

• Before maternity leave begins
• During maternity leave
• After returning to work

In practice, many employees choose to take holiday immediately before or after maternity leave to maximise paid time off.

Employers cannot require an employee to forgo holiday entitlement simply because they are on maternity leave.

What Happens to Unused Holiday During Maternity Leave?

Carrying Holiday Forward

If holiday cannot be taken during the leave year in which it is accrued, it is usually carried forward.

This is particularly common where:

• Maternity leave spans more than one holiday year
• There is insufficient time to take leave before or after maternity leave begins
• Operational needs prevent holiday being scheduled

Employees on maternity leave are legally allowed to carry over statutory holiday into the next leave year in certain circumstances.

Taking Holiday Before Maternity Leave

Many employees choose to take annual leave immediately before starting maternity leave. This can be beneficial because:

• It increases paid time off before the baby arrives
• It ensures entitlement is not lost or carried over unnecessarily
• It may provide financial support before maternity pay begins

Employers are generally expected to accommodate reasonable holiday requests before maternity leave, provided adequate notice is given.

Taking Holiday After Maternity Leave

Employees may also take holiday immediately after returning from maternity leave.

This is common because:

• A significant amount of holiday may have accrued during absence
• It allows a phased return to work
• It provides additional paid time while adjusting to childcare arrangements

Employers must allow employees to take their accrued entitlement, subject to normal notice requirements.

Holiday Pay and Maternity Pay

Statutory Maternity Pay (SMP)

During maternity leave, employees may receive Statutory Maternity Pay or Maternity Allowance depending on eligibility. These payments are separate from holiday pay.

Holiday Pay Is Paid Separately

When annual leave is taken during maternity leave or after return, it must be paid at the employee’s normal rate of pay.

Holiday pay is not included within maternity pay. Instead, it is calculated separately based on normal remuneration.

How Is Holiday Pay Calculated During Maternity Leave?

Holiday pay is based on the employee’s normal weekly pay.

This includes:

• Basic salary
• Regular overtime (if guaranteed or regularly worked)
• Commission payments
• Certain allowances

The calculation must reflect what the employee would have earned had they been working.

Importantly, maternity leave must not disadvantage employees when calculating holiday pay.

Can Employers Refuse Holiday Requests During Maternity Leave?

Employers can manage holiday scheduling, but they cannot refuse entitlement altogether.

They may refuse specific dates if:

• Business operations would be significantly affected
• Adequate notice has not been given
• The request does not align with company policy

However, employers must ensure that employees are still able to take their full statutory entitlement within a reasonable timeframe.

Common Holiday Pay Issues During Maternity Leave

Failure to Allow Accrual

Some employers incorrectly assume that holiday does not accrue during maternity leave. This is a legal error and can lead to claims.

Incorrect Calculation of Carry Over

Holiday carried over from maternity leave must be properly tracked. Mistakes often occur where multiple leave years overlap.

Pressure Not to Take Holiday

Employees should never be discouraged from taking holiday entitlement. Any pressure to forgo leave may amount to unlawful treatment.

Misunderstanding of Pay Rates

Holiday pay must reflect normal earnings, not reduced maternity pay.

Dismissal or Redundancy During Maternity Leave

If employment ends during maternity leave, employees are entitled to payment for all accrued but untaken holiday.

This is known as payment in lieu of holiday.

The calculation must include:

• Holiday accrued during maternity leave
• Any unused holiday from previous leave years
• Contractual holiday entitlement, if applicable

Failure to pay correctly can lead to claims for unlawful deduction from wages.

Can Holiday Be Paid Instead of Taken?

In most cases, statutory holiday cannot be replaced with payment while employment continues.

However, payment in lieu is allowed when:

• Employment ends
• There is outstanding accrued holiday
• Contractual terms permit additional arrangements

During maternity leave itself, holiday should generally be taken rather than paid out.

Maternity Leave and Bank Holidays

Bank holidays are included within statutory holiday entitlement.

If an employee would normally receive bank holidays as paid leave, they continue to accrue this entitlement during maternity leave.

Whether bank holidays are added to or included within annual leave depends on the terms of the employment contract.

What Employers Must Do

Employers have clear obligations when managing holiday during maternity leave.

They should:

• Accurately track holiday accrual
• Allow employees to take holiday before or after maternity leave
• Ensure correct holiday pay calculations
• Avoid penalising employees for taking maternity leave
• Keep clear records of entitlement and usage

Failure to manage these obligations properly can result in tribunal claims and financial liability.

What Employees Should Know

Employees on maternity leave should be aware of their rights, including:

• Holiday continues to accrue throughout maternity leave
• They can take holiday before, during, or after leave
• Holiday pay should reflect normal earnings
• They are entitled to carry over unused statutory holiday in many cases

Understanding these rights helps prevent loss of entitlement and ensures fair treatment.

Returning to Work After Maternity Leave

One of the most common issues arises when employees return from maternity leave with significant unused holiday.

In these situations:

• Employers must allow reasonable time for holiday to be taken
• Employees should plan leave in consultation with their employer
• Large balances of accrued holiday may require careful scheduling

It is often helpful for both parties to discuss holiday plans in advance of return.

Practical Advice for Employers

Employers should take a structured approach:

• Maintain accurate holiday records throughout maternity leave
• Provide clear guidance to employees about entitlement
• Ensure payroll systems correctly calculate holiday pay
• Seek legal advice where uncertainty arises

Good management reduces disputes and supports compliance.

Practical Advice for Employees

Employees should:

• Keep records of their holiday entitlement
• Check payslips for accuracy
• Plan holiday use around maternity leave
• Raise concerns early if entitlement is unclear

Early communication often prevents disputes from escalating.

How Blackstone Solicitors Can Help

At Blackstone Solicitors, we advise both employers and employees on all aspects of holiday pay during maternity leave. Our work includes:

• Advising on maternity rights and entitlements
• Resolving holiday pay disputes
• Representing clients in employment tribunal claims
• Reviewing HR policies and contracts
• Supporting employers with compliance strategies

We provide clear, practical advice tailored to real workplace situations across England and Wales.

Conclusion

Holiday pay during maternity leave is a well established legal right, but it is often misunderstood in practice. Employees continue to accrue annual leave throughout maternity leave, and that entitlement must be honoured and properly calculated.

For employers, careful management is essential to avoid disputes and ensure compliance. For employees, understanding the rules helps protect valuable entitlements during an important life stage.

At Blackstone Solicitors, we support clients through every stage of maternity related employment issues. Whether you are managing a workforce or navigating your own rights, early legal advice can make a significant difference to the outcome.

How to Contact Our Employment Law Solicitors

It is important for you to be well informed about the issues and possible implications of Employment Law. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.

To speak to our Employment law solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Please visit our website to see all the Employment Law services we offer: https://blackstonesolicitorsltd.co.uk/employment-law-services/

Authored by Ben Posted in Blog, News Tagged as

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