The National Minimum Wage rates are increasing from 1 October 2013. They will be:

•         Apprentice rates: £2.68 per hour. * But see note below.

•         Under 18s: £3.72 per hour.

•         18 to 20 years: £5.03 per hour.

•         Age 21 years and over: £6.31 per hour.

*This is the rate for apprentices under 19 years old or in their first year. Those 19 years or over and past the first year of apprenticeship should be paid at the rate applicable to their age.

 (Photo credit: Wikipedia)

All employers need to be aware of their responsibilities following the introduction of pension reforms. Some elements of this new legislation, such as the safeguards for individuals, came into effect for all employers from 1 July 2012.

The Pensions Regulator has issued “Getting Ready” notes for employers and this can be downloaded as a PDF document at http://www.thepensionsregulator.gov.uk/docs/pensions-reform-getting-ready-v4_1.pdf.

This article summarises some of the key points.

• Employers should find out the staging date from which the new auto enrolment regulations apply to their business.

• Employers will need to familiarise themselves with the duties they are likely to have to comply with. These could include: deciding on a pension scheme to use, preparing data to send to scheme administrators, preparing information to send to employees, and setting up payroll processes.

Staging Dates

1. Employers with 250 or more employees will be staged between October 2012 and February 2014.

2. Employers with 50 to 249 employees will be staged between 1 April 2014 and 1 April 2015.

3. Employers with less than 50 employees will be staged between 1 June 2015 and 1 April 2017.

4. New employers setting up a business from 1 April 2012 up to and including 30 September 2017 will have staging dates between 1 May 2017 and 1 February 2018.

In certain circumstances small employers (employers with less than 50 employees at 1 April 2012) can elect to move their staging date to a later modified date. These modified dates are published in the PDF linked earlier in this article.

The Pensions Regulator will be writing to each employer 12 months and 3 months ahead of their staging date.

Related articles

• Auto-enrolment: join a pension and get a big tax bill
• Are you In or Out? What do you think of the Changes to Pensions?
• Workers ‘unaware’ of pension change

New rates came into force on 1 October 2012 and are:

• £6.19 per hour for workers aged 21 and over – a rise of 11p
• £4.98 per hour for 18-20 year olds – no change
• £3.68 per hour for workers above school leaving age but under 18 – no change
• £2.65 per hour for apprentices – a rise of 5p

If your employer provides you with accommodation, they can count some of its value towards your NMW pay. This is called the accommodation offset. From October, the maximum that employers can count towards NMW pay will be £4.82 – a rise of 9p.

Related articles

• ‘No gain’ from rise in minimum wage, say union leaders
• Minimum wage change takes effect
• The high cost of low pay

The Pensions Regulator has published information about proposed workplace pension changes that are due to be phased in from next year.

Workers who will need to enrol in the new workplace pension arrangements unless they expressly choose to opt out are:

* Employees who earn more than the minimum earnings threshold (to be announced), and
* Are aged between 22 and state pension age, and
* Work in the UK.

Each employer will be given a date from which changes will have to be in place. This will be known as the staging date. Larger employers will have the earlier staging dates. The staging dates will begin in October 2012 and continue through to 2016.

Readers may find the following notes useful:

* Find out what your likely staging date will be at www.tpr.gov.uk/staging
* The employer will be required to contribute at least 3% of worker’s earnings.
* Employers and workers will be required to make a contribution such that the minimum, combined contribution is 8%.
* Employer and workers will qualify for tax relief on their contributions.
* Existing pension arrangements may qualify; you will need to check with your pensions advisor.

More general information on the changes is available at www.thepensionsregulator.gov.uk/pensions-reform.aspx

Related articles

• Government pension reforms ‘will leave savers worse off’ (telegraph.co.uk)
• The ACA have spoken – the DWP ought to listen (henrytapper.com)

A recent survey by Business Link has highlighted how difficult it is for a small business owner to cope with employment legislation. The results revealed that two thirds of small businesses fail to implement employment law properly.

The findings were:

• A quarter didn’t think it was their job to implement the law.
• A fifth weren’t sure how to do it.
• A third simply didn’t know what their legal obligations as an employer were.

What law is there?

Image via Wikipedia

From the initial recruitment process through to people leaving your business, the entire employment cycle is governed by legislation. For example, there are employment laws concerning:

• Pre-employment residency and police checks.
• Discrimination, from the wording of your job advertisement through to employment practices.
• Grievance procedures, if an employee has a complaint.
• Retirement and redundancy.

Yes, this is a lot to think about and unfortunately simply being unaware of your human resources responsibilities is no defence. In fact failing to comply with the law can have serious consequences for your business:

• Employment tribunals which can be time consuming and stressful.
• Paying out fines and compensation, causing a financial burden on your business.
• A damaged business reputation that can result in lost customers.

So what can you do to stay on top of employment law?

A lot of businesses are concerned that staying legally compliant is too time consuming and holds them back from managing and growing their business. Of course all business owners have a lot to deal with, but it is important to find time to put the correct procedures in place now, making it easier for you to implement the regulations, and protecting your business for the future.

For a start, consider if you have documented processes around:

• Confirming employee’s entitlement to work in the UK, by checking and copying certain original documents.
• Providing compliant contracts of employment, no later than two months after the employee starts work.
• Adhering to the national minimum wage, the minimum level of pay allowed by law to most workers over the age of 16.
• Creating and distributing your staff handbook, providing your employees with valuable policies and procedures.
• Providing equal opportunity recruitment, by objectively matching the criteria of the job specification to the competencies, qualifications and skills of each applicant.
• Successfully managing poor performers legally, fairly and consistently, by having a structured process in place.
• Sensitively handling grievances, providing structured informal and formal avenues of communication.
• Having a clear retirement policy to provide consistency and clarity to leavers.

There are a host of new employment related regulations coming into force on 6 April 2010. This is a brief summary of the regulations that are most likely to affect you or your business.

– Fit notes – these replace sick notes issued by GPs and will state what the worker can do, rather than what he or she is prevented from doing.
– Pension date – the date from which the individual can draw the state retirement pension will not necessarily fall exactly on a woman’s 60th birthday. For example, a women who reaches age 60 between 6 April 2010 and 5 May 2010 will have a state pension date of 6 May 2010. This date also affects the payment of the employee’s NI contributions.
– NI contribution years – individuals who reach state retirement age only have to accumulate 30 full years of NI contributions or credits to gain a full state pension.
– A single year of NI contributions will count towards the state pension. Until now a person had to accrue at least one quarter of their working life (about 11 years for a man, 10 for a woman) to be entitled to any state retirement pension. Each year of NI contributions will be worth roughly £3.20 of weekly pension at current rates. It will be essential to accurately record the NI number for every employee, so that each individual can collect their pension entitlement when they retire.
– Home responsibility protection credits (HRP) will be given on a weekly basis. This will allow the HRP credit to be combined with actual NI contributions to make up a full year of NI credits. HRP credits are given where a person stays at home to look after a child and claims child benefit.

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)