Challenge Blog

We are pleased to post our six-monthly HR & Employment Law Update containing current rates of statutory payments and other useful information that you need if you employ people.  If you have any questions don’t hesitate to get in touch and if you need any further support with any aspect of employing people then we’d be delighted to help.

STATUTORY PAYMENTS FROM 1^st OCTOBER

·         National Minimum Wage (NMW) rises to £5.80 an hour for workers aged 22 and over / £4.83 an hour for workers aged 18 to 21 / £3.57 an hour for workers under 18 but above compulsory school age

·         Tips paid to a worker through the employer’s payroll will no longer count towards calculating NMW

·         Statutory Redundancy Pay maximum limit increases to £380 per week – however employers should note that this increase only brings forward the annual increase so there will not be a further increase when it is usually due in February 2010

·         Statutory Sick Pay (SSP ) is £79.15 per week up to a maximum of 28 weeks

·         Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP ) is £123.06 per week (or 90% of average weekly pay if this is less) for 33 weeks following an initial 6 weeks at 90% of average weekly pay (39 weeks maternity or adoption pay in total)

·         Plans to extend SMP to one year have been delayed and this has been largely attributed to the current economic state and the additional costs of increasing this benefit

·         Statutory Paternity Pay (SPP) is £123.06 per week (or 90% of average weekly pay if this is less) for 2 weeks

There have been a number of rulings and decisions made that will impact on employers now and in the next two years; we have outlined them in brief and would be pleased to help if you require any further information.

SWINE FLU

At Challenge Manager we have been working with employers who have had outbreaks of Swine Flu in the workplace, to help contain infection and manage employee anxieties about the illness and possible effects for pregnant or other physically vulnerable staff.  Whilst currently the outbreak seems contained, we are warned that increases in infection could be seen as we move in to the winter months so we would suggest that you consider drafting a swine flu policy & procedure in preparation.    This should include business continuity plans in the event of a major outbreak in your workplace.

SICKNESS & HOLIDAY ABSENCE

On a related subject, the European Court of Justice (ECJ) has recently ruled that workers who are sick whilst on annual leave are now entitled to request that they are given this leave back to ensure that they get their full 5.6 weeks rest entitlement per year, and the argument has been made that workers are not getting this rest if they are in fact sick.   Just to remind you, 5.6 weeks is of course currently the statutory minimum leave inclusive of bank & public holidays that all workers are entitled to. 

Generally speaking employees are required to take this “reimbursed” leave in the same leave year unless this is not possible in which case it can be carried over.

It is worth noting that if a worker requests this additional annual leave and is therefore requesting that you treat the originally booked period of leave as sickness absence, employers are not required to pay holiday pay for both periods.  Sick pay (SSP or company sick pay subject to your policy) should be paid for the period now being claimed as sickness absence.

There are concerns being raised about how this right could be open to abuse by employees so we advise that employers review absence and holiday policies to ensure they clearly outline the company procedures for requesting annual leave and reporting sickness absence, as well as identifying the eligibility criteria for both company and statutory sick pay.

RETIREMENT AT 65

Following a lengthy action brought by Age UK against the default retirement age of 65, the High Court have ruled that this is lawful , providing employers have followed the correct notification procedures with employees who are approaching this retirement age.  Employers are advised to ensure they have a correct procedure for communicating with employees approaching the age of 65 in place and published.

EMPLOYING FOREIGN WORKERS

From 2010, new rules will be in force to attempt to ensure that British workers are first in line for job opportunities. The changes see employers required to advertise vacancies for skilled workers in the job centre before looking elsewhere for workers.  Businesses are advised to review recruitment policies where this new ruling may have an impact.

EXTENSION TO PATERNITY LEAVE

Proposals to extend paternity leave are due to come into force for families with children due in or after April 2011; these changes will entitle fathers to take up to six months paternity leave by giving families the right to transfer the last six months of maternity leave to the father on the mother’s return to work  Fathers would then receive paternity pay for three months of this time at the current rate of SMP (Statutory Maternity Pay) and the remainder would be unpaid.

Whilst this proposal is being hailed as increasing flexibility  for families, there are concerns raised about how this will work in practice for businesses and the research undertaken so far indicates that the take up by families for such a scheme will be very low.  Businesses however will need to ensure that maternity and paternity leave policies are updated by 2011 to reflect these changes once they are formally introduced.

RETIREMENT PENSION CHANGES

From 2012 it is planned that all eligible workers, who are not already in a good quality workplace scheme, will be automatically enrolled into either their employers’ pension scheme or a personal account scheme.  For the first time all employers will be required to contribute a minimum of 3 percent to an eligible employee’s workplace pension scheme. This will supplement the 4 percent contribution from the employee and around 1 percent from the Government in the form of tax relief.  Businesses are advised to begin considering how they will meet these costs now and to seek full guidance from an Independent Financial Advisor (IFA).

Contact us if we can help you with any of these areas of employing staff.