Action to take when paying Adoption Pay in certain circumstances, including employee becomes sick, leaves, dies, is awarded a pay rise, or the child dies.
Employees furloughed under the Coronavirus Job Retention Scheme (CJRS)
These rules apply where the employee’s period of family-related statutory pay begins on or after 25 April 2020.
If your employee was on furlough and you paid them with help from the CJRS during any part of the relevant 8 week period, there are different rules about how you work out their AWE.
This is to make sure your employee’s eligibility for SAP and earnings-related rate of SAP is not affected if their wages are lower than normal because of being furloughed.
The earnings used to work out their AWE for the part of the 8 week period that they were furloughed will be the higher of either what they:
- actually received from their employer
- would have received from their employer had they not been on furlough
Where it’s not clear what the employee would have received, a helpful starting point is the reference salary used to determine how much you can claim through the CJRS. You can find guidance on Working out 80% of your employees wages through the CJRS scheme.
You should also consider payments the employee was due to receive in the relevant period that would have been classed as earnings. This could include:
- bonus payments
- commission payments
No changes to how you work out their AWE will be needed where:
- you’re claiming the employee’s wages through the CJRS but you’re topping them up to full pay at your own cost - the employee’s earnings will not be lower than they would have been
- as a result of the coronavirus crisis, during the relevant period you agreed a reduction in pay with your employee outside of the CJRS
Employee earnings affected by a backdated pay rise
If your employee gets a backdated pay rise which increases the amount of earnings already paid in the relevant period, you must:
- recalculate the employee’s Average Weekly Earnings (AWE)
- pay the extra Statutory Adoption Pay (SAP) due
If your employee wasn’t entitled to SAP, you must recalculate their AWE to check if they may now be entitled and pay any SAP due.
Employee doesn’t qualify for SAP: PAYE Settlement Agreements
You must recalculate your employee’s AWE if all of the following apply:
- their AWE are less than the Lower Earnings Limit (LEL) in force at the end of the matching week
- they received any expense payments or benefits in kind in the relevant period
- the expenses or benefits were included in a PAYE Settlement Agreement
If an employee has entered into a salary sacrifice with you, their AWE is calculated using the amount of earnings actually paid to them during the relevant period. SAP cannot be sacrificed and must be paid in full.
Employee becomes sick
If your employee tells you that they are incapable of work during the SAP pay period you must check whether or not they are entitled to Statutory Sick Pay (SSP).
You cannot pay them SAP for any SAP pay week in which they are entitled to be paid SSP. Bear in mind that:
- SAP pay weeks can start on any day of the week
- your employee won’t normally be entitled to be paid SSP from the first day they are incapable of work
Where the incapacity ends within the SAP pay period, payment of SAP will recommence at the start of the next SAP pay week following the end of the employee’s incapacity to work.
Keeping in touch days
To keep in touch during their adoption leave and ease their eventual return to work, your employee can work for you during their SAP pay period for up to 10 days without ending their adoption leave or losing her SAP for the week in which that work is done. These 10 days are called ‘Keeping in Touch’ (KIT) days and enable your employee to undertake the odd day’s training or do some work for you on occasions.
You have no right to demand that such KIT work is undertaken and the employee has no obligation to undertake such work. Before any work is done, you must agree with your employee:
- what work they will be doing
- whether the KIT days are used consecutively, singly or in blocks, but any work on any day (even as little as an hour) will count as a whole KIT day
- how much they will be paid for work done
You may count the amount of SAP towards the contractual pay agreed with your employee but you must pay the weekly SAP rate the employee is entitled to and comply with your statutory obligations, eg paying at least the National Minimum Wage.
If your employee does more than 10 days work for you in their SAP pay period you cannot pay SAP to them for any week in which they do such work and their adoption leave will come to an end.
Once your employee has used their 10 KIT days, they will lose one week’s SAP for each week or part week they work for you.
The SAP pay period is not extended to take account of any such weeks. Any SAP lost in this way is always at the standard rate first, or 90% of the AWE if this is lower than the standard rate.
Employee isn’t returning to work
If your employee isn’t returning to work you must still pay them SAP to which they are entitled.
You cannot ask them to repay it.
Employee works for another employer
If your employee works for another employer during the SAP pay period, you need to check whether they worked for that employer during the Matching Week (MW).
It’s up to your employee to tell you that they are working for another employer.
If your employee is working for someone they:
- worked for during the MW, you should continue to pay them SAP as normal
- did not work for during the MW, you must stop paying SAP from the start of the SAP pay week they work for that employer
Employee taken into legal custody
You cannot pay SAP for any SAP pay week your employee is in legal custody or for any week in the pay period after that.
It’s your employee’s responsibility to tell you if they are detained in legal custody usually this means if they are arrested or in prison.
Your employee isn’t in legal custody if they are:
- voluntarily helping police with their enquiries
- out on bail
- serving a suspended sentence
Employee leaves job after being matched with a child
Your employee will still be eligible for SAP if they leave or stop working for you after they have been matched with a child.
It doesn’t matter why they left or that they aren’t coming back - they are entitled to SAP if they satisfy the qualifying conditions.
Your employee should give you 28 days notice of when they want to start to be paid if they can.
You can start paying your employee SAP up to 14 days before the child is expected to be placed, but no later than the day the child is placed or the day after if the employee is at work that day. If they don’t want to start being paid before the child is placed they must tell you when the child is placed so you know when to start paying them. Don’t start paying on the assumption that the child was placed on the expected date.
They won’t be eligible for any week in which they work for a new employer they weren’t employed by in the MW.
If your employee dies during the SAP pay period, you should pay SAP for the week in which they die, but not for any week in the pay period after that.
If the child dies during the SAP pay period, the pay period will end 8 weeks after the end of the SAP pay week in which the child stops living with the adopter, if it was not due to end earlier.
Child stops living with adopter
If the child ceases to live with the adopter during the SAP period, the pay period will end 8 weeks after the end of the SAP pay week in which the child stops living with the adopter, if it wasn’t due to end earlier.
More than one child is placed
This can happen where 2 or more siblings are adopted from the same family within 39 weeks of entitlement to SAP for the first child.
If a separate Matching Certificate is issued, this will be considered as a separate arrangement. Entitlement of up to 39 weeks of SAP will commence from the date the second child is placed with the adopter. Where periods of SAP overlap, payment of the first period of SAP will continue regardless of the second period of SAP and 2 payments of SAP may be payable for the same week.
Child isn’t placed
If you have already started to pay your employee but the child isn’t placed with them, the SAP period ends 8 weeks after the end of the week in which your employee is told that the child won’t be placed.
If your employee didn’t want to start being paid before the child was placed, then don’t start to pay them. Don’t start paying on the assumption that the child was placed on the expected date, it’s your employee’s responsibility to tell you when the child is placed.
Child is placed later
If you have already started to pay your employee, you should continue. The SAP period isn’t extended. You can start paying them up to 14 days before the date the child is expected to be placed with them and no later than the date the child is placed, or the day after if they are at work that day.
Reinstatement after dismissal
If your employee didn’t work for you during the qualifying period because you dismissed them, they are entitled to SAP as if they had not been dismissed, if:
- they are reinstated because an employment tribunal decides that you dismissed her unfairly
- you reinstate them as a result of a statutory grievance procedure
Reinstatement after Armed Forces service
If the employee didn’t work for you during the relevant period, because they were serving in the Armed Forces and they returned to work for you within 6 months of the end of their service in the Forces, they may still be able to get SAP.
For SAP the employee must have been continuously employed by you for at least 26 weeks including the Sunday of the MW. The period they served in the Armed Forces will not count as part of the 26 weeks but the period they were employed with you before and after service in the Armed Forces will count.
Trade Disputes or industrial action
Your employee must have been continuously employed by you for at least 26 weeks into the MW. Don’t count the period they were on strike, even for one day, as this week will not count as part of the 26 weeks as your employee must have been employed for 26 weeks from the start of their employment into the MW.
Breaks in employment
Some breaks between periods of employment will not interrupt a period of continuous employment for SAP purposes. Employees with an ongoing contract of service during the following breaks would remain continuously employed:
- temporary cessation of work – including short-term contract or agency workers
- public holidays – the employee can still get SAP
- sickness or injury – the employee can get SAP if the total period of incapacity is 26 weeks or less
- maternity leave – she works for you before and after the break she can get SAP or she was not working because of the birth, and she worked for you before and after the break and the break is not more than 26 weeks
- adoption leave – they were on adoption leave and they worked for you before and after the break
- paternity and parental leave – if the employee took paternity leave or parental leave when they were adopting a child or when a baby was born and they worked for you before and after the break they can get SAP