The CBI has called on the government to provide extra subsidies to help apprenticeship schemes.

The employers’ group wants to see a portion of the government’s £500 million recruitment subsidy fund re-directed towards supporting new apprenticeships. Under the CBI scheme, some £125 million would go towards supporting an additional 50,000 apprentices.

Employers would receive £2,500 in order to supplement the cost of taking on each extra apprentice.

Benefits of apprenticeships
As well as helping to combat unemployment amongst young people, there are good business reasons for considering employing an apprentice.

There is a well-documented shortage of skilled labour in the UK, which can make recruitment difficult. It may make more sense to take on someone young or under-skilled and to train them in the skills your business needs.

The real advantage of an apprenticeship is that it allows an employer to do just this while at the same time providing them with administrative help, financial support and, most importantly of all, a disciplined, measured approach to training.

Apprenticeships are as suited to small as they are to large businesses. Most apprentices are young people, but courses are open to older workers.

Earn and learn
The way that apprentices learn their trade is through a combination of both on-the-job experience and externally structured training. Not only does an apprentice get to understand the needs of the firm, the external training system means they can also bring new ideas to their work and to the business.

There are plans to make apprenticeships integral to UK business. Some 500,000 places should be available within the next decade. Even by 2013, it is hoped to have an extra 90,000 apprenticeships open to 16 to 18 year olds.

At the moment, there are 180 apprenticeship courses, ranging from construction to IT, from catering to manufacture. Recruits and employers have a choice of two types of apprenticeship: a standard course that lasts a year and leads to a level 2 NVQ and a two-year course that leads to a level 3 NVQ.

For the employer’s part, they are required to organise the training and manage the apprentice while they are at work. Apprentices must be paid a wage of no less than £95 a week, although the UK average is £170, and given time off work to study (normally a day a week).

In return, the Learning and Skills Council (LSC) will foot the bill for the whole cost of training 16 to 18 year olds and half the cost of training someone over the age of 18. Additionally, grants from the LSC can help to offset the cost of employing an apprentice.

There is an online service that matches employer vacancies with people seeking employment as apprentices in a variety of sectors and areas of the country.

Any business interested in taking on an employee, and making good the skills gaps they may be experiencing, can visit the LSC apprenticeship website at http://www.lsc.gov.uk/Vacancies/Apprenticeship/

Hands up all those employers who take a fairly relaxed approach to health and safety, because they think their work place is really quite a safe place, maybe an office?

Well consider this……

It is estimated that one third of all road traffic accidents involve someone who is ‘at work’!

Maybe you are thinking that providing all vehicles have a valid MOT certificate and the driver has a valid licence, then as employer you have done all you need to do – think again!

Health and safety law applies to ‘on the road’ working activities just as it applies to other work activities. If you send employees out onto the road, even if its only occassionally, then you have a legal duty to consider the risks they face as part of your health and safety system. Guidance is available from the HSE website.

Update

17/11/2009

By Jeremy Scott, Head of Regulatory and Corporate Defence at Langleys

Leading Lincoln law firm Langleys is alerting employers to the ruling in a recent case in which a company was fined £30,000 for breaches of health and safety legislation relating to the death of an employee who fell asleep at the wheel.

The driver was involved in an accident whilst driving home following a third consecutive shift of nearly 20 hours. The case is thought to be the first of its kind in the UK where the company in question was convicted even though their employee died outside working hours, on his commute home.

“The Court in the ‘Produce Connection’ case found that the potato company had failed to monitor their employees’ working hours. The court heard that the driver was thought to be suffering from “chronic fatigue” and had subsequently fallen asleep at the wheel. The company was ordered to pay the fine, together with costs of £24,000, after admitting two breaches of health and safety law.“

“This case demonstrates the need for employers to seriously think about the impact of driver fatigue, during both working hours and also on the commute home. A number of recent and current investigations show that the police and HSE will be jointly investigating accidents with a view to including not only the employee who was driving, but also the employer, in any subsequent prosecution. Company directors and other senior employees could find themselves in the dock facing not only large fines but also a prison sentence following the increase in penalties under the Health and Safety (Offences) Act 2008, which has only recently come into force.“

Langleys would advise employers to carry out appropriate risk assessments both in relation to employees and also in respect of each vehicle used and each journey undertaken. Thereafter they need to set up policies relating to driving, making it clear that any breach constitutes a disciplinary offence, provide ongoing training and back this up with relevant training records

The guiding principle here has to be that employers should periodically review driver fatigue, both during ‘at work’ driving, and during commuting, and develop measures to guard against it.

Image by DavidDMuir via Flickr

New minimum wage rates will apply from 1 October 2009. These show a small increase from the 2008 rates, the increases having been proposed while the rate of inflation was considerably higher than now.

The new rates and rates of increase are :

• Full rate (age 22 and over) - new rate £5.80 per hour; old rate £5.73 per hour; increase 1.2%
• 18 – 21 rate – new rate £4.83 per hour; old rate £4.77 per hour; increase 1.25%
• Youth rate – new rate £3.57 per hour; old rate £3.53 per hour; increase 1.1%

More information on the minimum wage is available from the HMRC website which has a dedicated National Minimum Wage area.

HM Revenue & Customs are responsible for monitoring the National Minimum Wage. It is they who will fine you if you fail to pay the correct rates. Currently fines are 50% of the underpayment due to workers subject to a minimum £100 fine and maximum £5,000 fine.

From 1 October 2009 employers cannot use tips to make up wages to the National Minimum Wage, regardless of whether employees receive them through the payroll or in some other way.

In order to qualify for Child Tax Credits (CTC’s) the person responsible for taking care of your children (child) had to be registered with the Childcare Approval Scheme.

From 18 July 2009 the Childcare Approval Scheme ceased to exist and all childcare providers approved under this scheme (for example a nanny or foster carer working as a childminder) must either become registered with Ofsted or they will become unregistered providers.

Taxpayers who are affected by this change are advised to check with their childcare provider to see what they have done or plan to do.

It is no longer possible to claim tax credits unless the childcare provider is registered with Ofsted from 18 July 2009.

If a childcare provider does not intend to register with Ofsted, an alternative registered provider would need to be used in order to be able to claim or continue claiming the childcare element of tax credits.

Related articles

• Families risk losing childcare cash (telegraph.co.uk)

Changes to employment law are underway. From the 12 October 2009 new measures are being introduced to vet the suitability of persons working with children or vulnerable adults.

It is to be called the Vetting and Barring Scheme (VBS) and will be

administered by a new public body to be called the Independent Safeguarding Authority (ISA).

From July 2010 all new employees can register with the ISA.

From November 2010 all new employees and volunteers must register before they start work. Until they have registered they cannot be legally employed.

Failure to comply with the new registration demands could possibly result in custodial sentences for the employee and the employer!

A range of useful online tools, posters and leaflets can be downloaded from the ISA web site at www.isa-gov.org.uk/toolkit or call 0300 123 1111.

Related articles by Zemanta

• Call for rethink over schools vetting row (guardian.co.uk)
• Re-think needed on school vetting (news.bbc.co.uk)
• Criminal Records Bureau errors lead to hundreds being branded criminals (telegraph.co.uk)

All employers should be aware that changes have been introduced to the penalties that will automatically be levied after 6 April 2009 if you fail to observe your obligations regarding payment of National Minimum Wage rates.

From 6 April 2009, a new automatic penalty will be levied where HMRC compliance officers find arrears of the National Minimum Wage (NMW).

Penalties will range from £100 to £5,000 and those employers who settle within 14 days of notification will receive a 50 per cent discount of the penalty for prompt payment. The penalty must be paid in addition to any arrears owed to the workers. The most serious cases of non compliance may be tried in a Crown Court and subject to an unlimited fine.

To reflect this change, the current system of separate NMW enforcement and penalty notices will be replaced by a combined notice of underpayment and penalty. This will be issued whenever HMRC discover that arrears were outstanding at the start of their enquiries.

The notice will detail the amounts due to workers and any penalty due on those arrears. For PAYE reference periods starting on or after 6 April 2009 the penalty will be half the total underpayments shown on the notice. HMRC can pursue arrears claims for workers going back up to six years.

You will be able to appeal both the amount of the arrears and the penalty to an Employment Tribunal (an Industrial Tribunal in Northern Ireland) under new appeal rights. You can call the National Minimum Wage Help line in confidence on Tel 0845 6000 678.

The rates are as follows:

The rates set are based on the recommendations of the independent Low Pay Commission. The rates change on 1st October each year.

National Minimum Wage rates applicable from 1 October 2008

• Workers aged 22 and over – £5.73 per hour
• Workers aged 18-21 –         £4.77 per hour
• Workers aged 16-17 –         £3.53 per hour
• Accommodation offset –      £4.46 per day (£31.22 per week)

The basic rules for employers with new employees are important for any business.

There is no ‘Casual Labour’ exemption, if you take an employee on with intention of keeping them for just a couple of weeks on a temporary basis – the rules still apply.

If the correct PAYE and NIC is not deducted off employees, then the Employer will be held liable for any shortfall discovered.

If a new employee does not have a P45 from their previous job, then they must sign a P46 (or if they are students working only in the holidays, a P38S).

If they tick Boxes A or B – they will be on the emergency PAYE code (of 647L in 2009/10)

Employees on the basic code of 647L will pay no tax on earnings up to £125 a week, above that tax is deducted at 20%.

National Insurance Contributions are paid by the employee (11%) and employer (12.8%) on earnings above £110 per week.

If the week’s earnings are between £95.01 and £110.00 per week there are no contributions deducted but the employee is still credited with a basic National Insurance contribution. For this reason a form P11 (deduction sheet) must be maintained throughout the year for the employee.

If the employer does not pay an employee more than the NIC LEL (Lower Earnings Level) (of £95 a week in 2009/10), they do not have to prepare a P11 deductions sheet for them or include them on the year end P35. However, the employer must still have a record of wages paid to each employee in each week or month.

Many businesses are being forced to reduce costs, and make employees redundant.  As an employer what are the rules on making people redundant?

The notes that follow highlight a few but not all of the considerations that affect redundancy pay outs:

Q. Do we deduct tax or National Insurance from redundancy payments?
A. No – as long as the amount does not exceed £30,000 and it is a genuine redundancy payment.
Q. Can I make anyone redundant?

A. If the employee is no longer required within the business then yes, but be AWARE that it is possible to unfairly select someone for redundancy, the grounds for unfair selection can be found on the government website here. Also, if there is alternative work within the business this must be offered to the employee before they are made redundant.

You should consult employees individually regardless of the number you plan to make redundant.

If you fail to do so, any subsequent dismissals may be unfair.

For redundancy dismissals, the statutory procedures may form part of the consultation process. However, the procedures only apply in non-collective redundancy situations, ie when you plan to make fewer than 20 employees redundant.

Under the standard procedure, you must write to each employee setting out why you are thinking of making them redundant and inviting them to a meeting to discuss the proposed dismissal. The employee has the right to appeal if you still decide to make them redundant.

If you fail to follow the procedure when it applies, any dismissals you make will be automatically unfair.

Q. Where can I get advice on rights and duties?
A. Try ACAS  www.acas.co.uk and BERR www.berr.gov.uk

Acas Helpline

08457 47 47 47

BERR Redundancy Payments Helpline

0845 145 0004

Q. What happens if I give an employee a company car or other goods in lieu of a redundancy payment?
A. Anything given other than money is converted to a cash equivalent – if the purpose of the transfer of assets is given to compensate an employee for his redundancy this cash equivalent forms part of the £30,000 tax free sum.

Q. What happens if our business cannot afford to pay the statutory redundancy due?
A. If absolutely necessary, the Redundancy Payments Office will make the payments.

Q. If I give a terminal bonus or payment for extra work done leading up to redundancy, is this tax free?
A. No – only genuine payments for redundancy are included in the £30,000 tax free sum.

Q. Which employees qualify for statutory redundancy?
A. To qualify at all, employees must have completed 2 years service since age 18.

Statutory redundancy pay is based on:

• the employee’s age
• the employee’s amount of continuous service – up to a maximum of 20 years
• the employee’s weekly pay – up to a limit of £330 where the employee’s employment ends on or after 1 February 2008 (£350 on or after 1 February 2009)

Currently, the maximum SRP payable is  £10,500 (£9,900for redundancies before 1 February 2009).

There is a calculator to work out the amount due on the business link website here.
If you have concerns about redundancy as an employer or employee we would be happy to discuss the issues with you.

Many directors of small limited companies effectively pay themselves at rates below the National Minimum Wage (NMW). This is perfectly legal as long as the director concerned does not have a contract of employment. As soon as a contract of employment is introduced and signed the NMW must be applied.

This choice, to be a contracted employee or not, also impacts upon a director’s eligibility for Working Tax Credit (WTC).

If you are a director with no contract of employment you will not qualify for WTC unless your partner works the required number of hours each week.

If you do have a contract of employment and pay yourself at least NMW for hours worked, you should qualify for WTC.

The current rates of National Minimum Wage are published below.

The rates from 1 October 2008 are:

- adults (which means people aged 22 and over), £5.73 an hour

- workers aged 18-21, £4.77 an hour – the ‘development rate’

- young people (those older than school leaving age and younger than 18; you’re under school leaving age until the end of summer term of the school year in which you turn 16), £3.53 an hour

- Apprentices under the age of 19 are not entitled to the National Minimum Wage. Apprentices who are 19 or over and in the first 12 months of their apprenticeship are not entitled to the National Minimum Wage.