Business face £2bn maternity pay bill

A new plan passed by an EU committee could leave businesses facing further financial difficulties. The European Parliament has put forward plans to treble maternity pay, forcing firms to pay new mothers a full salary for at least 20 weeks.

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Currently women in the UK are paid 90 per cent of their salary at the start of maternity leave and a basic £123 per week after six weeks. A Government spokesman claimed that ministers were "disappointed" by the plan and hoped to overturn it before it becomes law but Labour MEP's may well back the move.

While the state reimburses UK businesses a large percentage of maternity pay, the current financial climate and the proposed increase could see companies footing more of the bill. And that, in turn, may discourage firms from employing women of childbearing age.

A spokesman for the Institute of Directors told the Daily Mail: "The directive is a massive worry to us. We estimate that the UK will be hit with a bill of £1.5 billion to £2 billion a year – a very substantial cost. Given the state of the public finances there has to be a strong risk that employers would end up being forced to pay."

In fact, business leaders across the country unanimously condemned the plan which could ruin many small businesses.

The proposal is due to go before the full European Parliament next month and, while the Government insists that it will fight the plans, the UK has already surrendered its veto on employment law and therefore its hopes of protecting British businesses.

Do you think women employees deserve more maternity pay, or will this new law leave UK businesses no choice but to discriminate against women?