💼 The Alabaster Ruling: What It Is, When It Kicks In, and How to Pay !

Let’s clear something up. The Alabaster ruling isn’t a Victorian court case, in fact it's fairly new (this century anyway...). It’s a legal decision that affects how maternity pay is calculated when an employee gets a backdated pay rise.

If you're in payroll, or you're the go-to finance person at a small business, this one’s worth knowing, because getting it wrong could mean underpaying someone on maternity leave. And nobody wants that.

So What Is the Alabaster Ruling?

It all started with a 2004 court case: Christine Alabaster v Barclays Bank. (Spoiler alert: Christine won.)

The court decided that:

If a woman gets a pay rise after her maternity leave has started, but that pay rise applies to a time before her leave, her Statutory Maternity Pay (SMP) must be recalculated.

Basically, you can’t leave that pay rise out of the equation just because it arrived a bit late. If the pay boost covers any part of the period used to calculate SMP, the employee is entitled to more money.

📆 When Does It Apply?

It’s all about timing. SMP is based on average weekly earnings in the 8 weeks leading up to the qualifying week (which is 15 weeks before the due date).

If a backdated pay rise lands after this window but covers any of those 8 weeks, then ding ding! The Alabaster ruling applies.

When Is the Alabaster Top-Up Paid?

Here’s the bit everyone asks: “When do we actually pay this Alabaster adjustment?”

Short answer: As soon as you realise it’s due.

Here’s the typical flow:

1. The employee is already on maternity leave.

2. A pay rise is awarded (perhaps as part of a company-wide increase or a performance review).

3. That rise is backdated to before the qualifying earnings period.

4. Payroll spots it and goes, “Ah. Alabaster.”

5. They recalculate the SMP and pay the difference—usually as a lump sum top-up through the next available payroll.

   
   

No need to mess with all the previous payslips, just figure out what should have been paid and issue the difference.

🔍 A Quick Example

Let’s say:

• Emily goes on maternity leave on 1st April.

• In May, her employer gives her a 6% pay rise, backdated to 1st March.

• That March period falls within her SMP calculation window.

• So, her average weekly earnings go up.

• Which means her SMP goes up, too.

• Payroll works out the extra SMP she was short-changed in April and pays her the difference.

  
  

Easy when you know what you're looking for.

What Employers Should Do

Here’s your cheat sheet:

• Always check if pay rises are backdated.

• Look at when the increase applies, not when it’s paid.

• Recalculate SMP if the qualifying earnings window is affected.

• Pay the difference ASAP - don’t wait until maternity leave ends.

• You can reclaim the extra SMP from HMRC just like the rest.

In Summary, If a backdated pay rise overlaps the SMP earnings window, recalculate SMP, pay the extra in the next payroll run, and reclaim the cost from HMRC.

Got someone on maternity leave and wondering if this applies? Or did a pay rise land and now you’re scratching your head? Give us a shout.