Do Companies Have To Provide Childcare Vouchers While A Woman Is Pregnant?

The Employment Appeal Tribunal (EAT) has recently ruled that childcare vouchers should not be considered as a remuneration during maternity leave. This decision was made in 2016 and has been a topic of debate among employers. While federal law does not require employers to provide paid maternity leave, an exception applies under the Federal Employee Paid Leave Act. Employers can provide childcare vouchers as a benefit of their employment and support staff with the costs of caring for a young child.

HMRC has removed the requirement for employers to provide childcare vouchers on behalf of employees on Statutory Maternity Leave and receiving no pay or only receiving Statutory Maternity Pay (SMP). However, the prevailing view is that childcare vouchers should continue to be provided during maternity leave. The EAT reversed this decision, stating that childcare vouchers do represent part of an employee’s remuneration since pay had been deducted.

The Childcare Voucher scheme allows working parents to sacrifice part of their pre-tax salary to pay for registered childcare, resulting in savings on childcare. However, the EAT reversed this decision, holding that childcare vouchers should be considered part of an employee’s remuneration.

If an employee has no earnings over and above SMP, childcare vouchers will stop. Guidance from HMRC states that childcare vouchers are a non-cash benefit, and women should be entitled to benefit from them throughout their maternity leave. Vouchers provided outside a salary sacrifice scheme will still be classed as a non-cash benefit and should continue to be provided during maternity leave.

In conclusion, childcare vouchers may not be payable during maternity leave if an employee is in a salary sacrifice scheme and there is no occupational maternity pay to deduct.