FIA confirms maternity pay won't be included in cost cap
Formula 1's governing body the FIA has confirmed that maternity pay will not be included in the total...
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Formula 1's governing body the FIA has confirmed that maternity pay will not be included in the total amount that teams are allowed to spend, with staff entertainment also set to be excluded from the total from 2026.
It's part of a review and overhaul of the provisions of the cost cap. The allowed expenditure is likely to expected to be raised from $135 million to around $220 million, but more elements will be included that were previously exempt.
Teams were not happy by suggestions that maternity leave and staff entertainment would be among the items included int her revised cost cap, but the FIA has now confirmed that neither will be the case.
With respect to maternity leave it was felt that including this under the cap would discourage teams from hiring more women, something that the FIA is very keen to see. And the FIA didn't want to see teams being forced to slash staff entertainment, especially as this was not a direct development expense.
“All stakeholders have agreed that the existing regulatory framework should be simplified, while retaining its robustness," said the FIA’s head of single-seater financial regulations, Federico Lodi.
“One of the levers identified to achieve simplification is to review the category of costs that may be excluded from the cost cap," he continued.
He added that "the aim was to include more cost in the perimeter in exchange for a correspondent reassessment of the overall cost cap level.
“During the discussion with teams, a range of exclusions, including maternity/paternity leave and entertainment, were considered for being included in the perimeter of the cost cap," he explained.
“This was in exchange for a correspondent increase of cost cap level that would have allowed teams to continue to fund maternity/paternity leave programs and entertainment events without any consequences for cost cap purposes.
“But during the last F1 Commission meeting, it was unanimously agreed that these costs should remain excluded from the perimeter of the cost cap," he stated emphatically.
Discussions between the FIA and teams about the various provisions of the revamped cost cap are ongoing. Another remaining point of contention is over capital expenditure allowances, and how depreciation of assets like ageing wind tunnels is dealt with.
"An amendment is currently being assessed to the treatment of these investments, with the expected inclusion of depreciation and amortisation of fixed assets within the perimeter of the cost cap, and the removal of the capital expenditure allowance."
The FIA is keen to ensure that any raise in the headline cost cap is not seen as a relaxation of the tight budget expenditure controls that the sport introduced to make the sport more affordable and appealing to new manufacturers.
Companies like Audi and Ford had been hesitant to sign up to F1 because of the spiralling costs, but have now announced plans to join F1 from 2026 when new engine regulations are introduced.
Red Bull's chief technical officer Adrian Newey recently spoke out about "the hidden danger of the cost cap" in weakening F1’s position as a top destination for engineering graduates.
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