When an employee goes on maternity leave, annual leave does not pause. It keeps accruing, the same as if they were at work. That surprises some employers, and mishandling it is one of the more common compliance mistakes small businesses make.
This post covers what the rules are, what changed in April 2024, how to handle the practical side of things, and what to watch out for when someone returns from maternity leave.
Annual leave continues to accrue throughout maternity leave
Employees continue to build up holiday entitlement during maternity leave and can take any holiday they have accrued before or after the leave. This applies to the full 52 weeks, whether the employee is on Ordinary Maternity Leave (the first 26 weeks) or Additional Maternity Leave (the second 26 weeks).
This includes bank holidays. Employees should build up the same number of bank holiday days as if they had been working throughout.
So an employee who takes a full year of maternity leave and ordinarily receives 28 days of annual leave (including bank holidays) will return to work having accrued 28 days of untaken leave. If their entitlement is higher than the statutory minimum, they accrue that higher amount.
Can employees take annual leave during maternity leave?
Technically, an employee cannot take annual leave at the same time as maternity leave. The two types of leave cannot run concurrently.
In practice, this means an employee can choose to take annual leave immediately before their maternity leave starts, or immediately after it ends, as a way of extending their time away from work. Both are entirely lawful. Many employees use pre-maternity annual leave to bring their last working day forward, particularly if they are close to their due date.
As an employer, you cannot require an employee to take annual leave during their maternity leave period. If they have untaken leave at the end of maternity leave, you need to make arrangements for them to take it.
Carry-over after maternity leave
If an employee cannot take their holiday because they are on maternity leave, their employer should let them carry over up to 5.6 weeks of unused days into the next holiday year.
If the employee's leave year ends while they are still on maternity leave, they are entitled to carry that untaken leave into the following year rather than losing it. This is a legal right, not a discretionary arrangement.
We covered carry-over rules in more detail in the annual leave carry-over post, but the key point here is that maternity leave is one of the clearest cases where carry-over must be permitted. An employee should never lose annual leave entitlement simply because their maternity leave overlapped with the end of the leave year.
What changed in April 2024
Two things worth knowing about the April 2024 changes.
First, the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, which came into force on 1 January 2024, codified carry-over rights for family leave into statute, making the existing position clearer and more enforceable.
Second, the Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024, which came into force on 6 April 2024, extended redundancy protections for employees on maternity leave. The protected period now starts from when the employer is informed of the pregnancy and extends for 18 months after the birth. This is not directly about annual leave, but it is part of the same package of changes affecting maternity rights and worth being aware of.
Returning to work: the practical issues
This is where things can get complicated for small employers, and where a bit of forward planning goes a long way.
An employee may return with a large leave balance. If someone has taken a full year of maternity leave and their leave year ran from January to December, they could return in January with a full year's entitlement plus any carried-over leave from the previous year. That can mean 40 or more days of leave outstanding. The employee is entitled to take it, and you need to be prepared for that.
Talk to the employee before they return. The best approach is to discuss leave plans as part of the return-to-work conversation. How much leave has accrued? When does the employee want to take it? Are there any periods that do not work for the business? Having this conversation early avoids surprises.
Annual leave can immediately follow maternity leave. If an employee wants to take annual leave straight after their maternity leave ends, they are entitled to do so. This is a common arrangement. The employee must give the usual notice, but you cannot refuse simply because the leave follows on from maternity leave.
If an employee returns part-time, entitlement changes from that point. If an employee reduces their hours after returning from maternity leave, their new contract will usually start at the end of their maternity leave, which means their holiday entitlement will be calculated on a pro-rata basis from that point. This can mean a larger outstanding balance from the maternity period needs to be taken at full-time rates, while future entitlement accrues at part-time rates. Worth working through the numbers in advance.
An employee who leaves without returning still gets paid out for accrued leave. If an employee decides not to return after maternity leave, they are entitled to be paid for all accrued but untaken annual leave. Make sure your records are accurate so there is no dispute about the balance.
A note on enhanced maternity leave policies
Some employers offer enhanced annual leave entitlement as part of a contractual benefit, for example 30 or 33 days rather than the statutory 28. Whatever the contractual entitlement is, it is that higher figure that accrues during maternity leave, not just the statutory minimum.
If you offer enhanced annual leave, it is worth making sure your maternity leave policy is consistent with it, and that managers understand how the accrual works.
Practical steps for small employers
Know when the leave year ends relative to maternity leave. If an employee's maternity leave will cross the end of the leave year, plan for carry-over from the start.
Keep a record of accrued leave throughout the maternity period. Do not leave the calculation until the employee is about to return. Know the balance in advance.
Have a return-to-work conversation that covers leave. Agree a plan for when accrued leave will be taken before the employee comes back, not after.
Do not require employees to use leave during maternity leave. This is not permitted and would likely constitute a detriment related to maternity leave.
Check your contracts and policies are consistent. If your maternity policy and your annual leave policy say different things about how leave accrues, that is a gap worth closing.
A quick summary
Annual leave accrues throughout maternity leave, including bank holidays. Employees cannot take annual leave during maternity leave, but can take it immediately before or after. If untaken leave cannot be used because of maternity leave, it must be carried over. The carry-over rules were codified in statute in January 2024. When an employee returns, they may have a significant leave balance, and managing that starts with a conversation before they come back.
For related reading, the parental leave guide covers the broader picture on maternity, paternity, and shared parental leave. And the annual leave carry-over post goes deeper on when carry-over is and is not a legal right.
If you are managing leave for a small team and finding it hard to keep on top of balances, particularly around longer absences like maternity leave, Absently keeps everything in one place so you always know where each person stands. Thirty days free, no credit card required.