Maternity leave extends to 14 weeks, how is paid maternity leave calculated?

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Processing payroll is not as easy as people always think, in fact, there is a difference between reading the regulations only and calculating in person. Starting from December 2020, the Labour Department had adjusted the old maternity leave regulation that been applied for 48 years from 10 weeks to 14 weeks.

Which employees are eligible for paid maternity leave? When can pregnant employees take maternity leave? How to calculate the multi-payment situation of paid maternity leave? Workstem would like to share all these with you today in this blog.

1. How can an employee be eligible for paid maternity leave?

To determine whether an employee is eligible for paid maternity leave, it is necessary to check whether the pregnant employee meets all the requirements with reference to the following laws:

The Labour Department defines that an employee is eligible for 14 weeks of paid maternity leave if:

  1. She has been employed under a continuous contract for NOT less than 40 weeks immediately before the commencement of scheduled maternity leave;
  1. She has given notice of pregnancy and her intention to take maternity leave to her employer after the pregnancy has been confirmed, such as by presenting a medical certificate confirming her pregnancy to the employer; and
  1. She has produced a medical certificate specifying the expected date of confinement if so required by her employer.

In short, employees who are employed under a continuous contract for 40 weeks or more (280 days) are eligible for 14 weeks (98 days) of paid maternity leave. However, in case the length of employment service under a continuous contract is less than 40 weeks immediately before the commencement of scheduled maternity leave, the employee is eligible for 14* weeks’ maternity leave WITHOUT PAY if the employee has given notice of pregnancy and her intention to take maternity leave to her employer after the pregnancy has been confirmed.

Example: 

Amy, an employee who joined company A  under a continuous contract on January 15, 2020. At the beginning of March 2021, she has given notice of pregnancy and her intention to take maternity leave to the employer, and the company does not mandate the submission of a doctor’s statement. According to the Employment Ordinance, Amy in this case can take 14 weeks of paid maternity leave at the specified time as she meets the three rules shown above at the same time.

Now we know what type of pregnant employees could be entitled with paid maternity leave, let’s take a look at how pregnant employees take maternity leave then!

2. Quick Q&A on How to handle paid maternity leave

How should pregnant employees take maternity leave?

Maternity leave for normal pregnant employees:

According to the Employment Ordinance, with the agreement of her employer, a pregnant employee may decide to commence her maternity leave from 2 to 4 weeks before the expected date of confinement. If the employee does not decide on the date, or fails to secure her employer’s agreement, the employee shall commence her maternity leave 4 weeks before the expected date of confinement.

Maternity leave for early confinement and unfortunate miscarriage employees:

Maternity leave commences on the date of confinement if it occurs before the scheduled maternity leave.

The updated definition of “miscarriage” is applicable to female employees who suffer from miscarriage on or after the commencement date of the Amendment Ordinance. As for the acceptance of certificate of attendance as proof in respect of entitlement to sickness allowance for a day on which an eligible employee attends a medical examination in relation to her pregnancy, it is applicable to medical examinations conducted on or after the commencement date of the Amendment Ordinance.

  1. updating the definition of “miscarriage” under the EO from “before 28 weeks of pregnancy” to “before 24 weeks of pregnancy” to entitle a female employee, whose child is incapable of survival after being born at or after 24 weeks of pregnancy, to ML if other conditions are met; and
  1. accepting a certificate of attendance issued by a medical professional as documentary proof for entitling an eligible employee to sickness allowance for any day on which the employee has attended a medical examination in relation to her pregnancy.

Is an employer required to pay a pregnant employee sickness allowance for absence due to attendance at medical examinations in relation to pregnancy? 

When the employee’s absence from work to attend medical examination in relation to her pregnancy is supported by an appropriate medical certificate or a certificate of attendance, any such day on which she is absent shall be counted as a sickness day. Under such circumstances, if the employee has accumulated sufficient number of paid sickness days, each sickness day shall be paid sickness allowance which is a sum equivalent to four-fifths of her average daily wages.

Can an employer dismiss a pregnant employee?

The Amendment Ordinance defines that if the employee satisfies all the relevant conditions stipulated, the employer shall not dismiss the employee from the date when the employee is certified by a medical certificate to be pregnant until the date when the maternity leave expires and the employee should return to work.

If a pregnant employee is dismissed illegally, the employer will face a fine of $100,000, also pay a further sum equivalent to one month’s wages as compensation.

Notice: the employer is not prohibited from dismissing a pregnant employee under the following circumstances :

  • the employee is summarily dismissed due to her serious misconduct; or
  • where it has been expressly agreed that the employment is on probation, the employee is dismissed for reasons other than pregnancy during the probation period of not more than 12 weeks.

3. How to calculate paid maternity leave?

With the amendment of the Employment Ordinance in 2020, the regulations on maternity leave have the following changes:

  1. Employers can provide eligible employees with up to 14 weeks of statutory maternity leave. The maternity leave pay is ⅘ of the average daily wages for the first 12 months. The maximum maternity leave allowance for each employee is HK$80,000.
  1. As for the additional part that employers need to pay due to the amendment, the current situation is that employers only need to provide 80% of the amount of paid maternity leave for working pregnant employees. Employers are required to pay the additional four weeks’ MLP (i.e. 11th to 14th week) under the Amendment Ordinance on the normal pay day. Afterwards, employers may apply to the Government for reimbursement of such MLP paid.

Notice: In calculating the average monthly wages, an employer has to exclude (i) the periods for which an employee is not paid her wages or full wages, including rest day, statutory holiday, annual leave, sickness day, maternity leave, sick leave due to work injuries or leave taken with the agreement of the employer, and any normal working day on which the employee is not provided by the employer with work; together with (ii) the sum paid to the employee for such periods.

Example 1:

Laura, an employee who is employed under a continuous contract, began to take paid maternity leave on May 17, 2021. According to the amended Ordinance, the employee’s maternity leave allowance should be maintained at ⅘ of the average daily wage. Therefore, we should use the payroll calculation from May 2020 to April 2021 last year. 

Assuming that Laura’s monthly salary is HKD 10,000, so rest days are paid, the calculation is as follows:

(10,000*12)/365*⅘*98=25,775.3

Example 2:

Sunny, with a monthly salary of HKD 20,000, intends to take paid maternity leave on May 17, 2021. She is also under a continuous contract, so the allowance should be calculated at 4/5 of the average daily wage. But when HR calculated maternity leave allowance, it was found that she had a serious illness in December last year and took 10 days of paid sick leave and 21 days of unpaid sick leave, then her calculation formula is as follows:

(20,000*11+20,000/31*⅘*10)/(365-21-10)*98=66,065.2

4. Is maternity leave complicated? Workstem helps you!

Computation of employee allowance payments such as maternity leave requires a full understanding of regulations and corresponding business knowledge. Similarly, HR staff also need to concern the dynamics and latest news of relevant agencies to avoid missing important information on regulatory adjustments.

If complex work needs to be done efficiently, an automatic and systematic approach is required. Mature payroll management tools can not only help companies solve the above problems, but also help calculate accurately and quickly.

Built-in massive Leave policies, easy to handle maternity leave and allowance calculation

Workstem has a number of selectable setup options that can cater to your unique leave policies. With our customizable nature, our e leave system can accommodate all Startups, SMEs and large corporations in different industries.

Click the link now to experience a free 14-day human resources (HR) system! Come and join us!

(The content and information in this article are for reference only. The accuracy and reliability of the information are subject to the latest government regulations.  If you want to reprint the article or content, please contact us first or attach a link to this article, and indicate the source of reprint.)
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