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HR UPDATE - SEPTEMBER 2009
NEW PATERNITY RIGHTS
The Government has decided NOT to extend statutory maternity pay (SMP) from 39 to 52 weeks as planned in 2010. A new date for extending SMP had not yet been set due to financial restraint in the current economic climate.
However, the Government has confirmed their intention to allow parents to share up to six months parental leave after the baby's first six months, which will come into force on 3rd April 2011. The new rights will allow mothers returning to work after six months maternity leave to transfer their unused six months' leave to their partner.
Fathers are currently entitled to a maximum of a fortnight's paternity leave, will have a statutory right to up to three months' paid (SPP) and three months' unpaid leave. Gay couples will also be able to share maternity leave.
INCREASE IN PAY FOR APPRENTICES
From 1 August 2009 the national minimum wage for apprentices increased from £80 to £95 per week.
STATUTORY REDUNDANCY PAY IS SET TO INCREASE FROM 1 OCTOBER 2009.
The maximum statutory limit for a week’s redundancy pay will increase to £380 with effect from 1 October 2009. Employees with at least two years’ continuous service qualify for a redundancy payment.
The entitlement is as follows:
For each complete year of service until the age of 21 - half a week’s pay
For each complete year of service between the ages of 22 and 40 inclusive - one week’s pay
For each complete year of service over the age of 41 - one and a half weeks’ pay.
The maximum service to be taken into account in calculating redundancy is 20 years. Therefore, the maximum statutory payment cannot exceed £11,400 (30 weeks’ pay).
PENSION CHANGES AHEAD
Under provisions contained in the Pensions Act 2008 employee pension enrolment and employer contributions are to be made compulsory.
These provisions, which are due to come into force in 2012, cover the automatic enrolment of qualifying workers into a qualifying workplace pension scheme and a duty on the employer to make contributions to such a scheme. A universal personal account scheme is being created to ensure that employers comply with these duties.
The main details of the scheme are:
Automatic enrolment of eligible employees aged between 22 and state pension age earning over £5,035 per annum (unless the employee opts out).
Employer contributions of 3% on a band earnings, initially set as £5,035 - £33,540
Employee contributions of 4%, with an additional 1% funded by the government in the form of tax relief.
Both employer and employee contribution levels will be phased in over three years.
The Pensions Regulator will have the power to penalise employers who do not comply with the regime.
Consultations and regulations will be issued in the lead up to the introduction of the legislation.
JUST A REMINDER ………...
NEW NATIONAL MINIMUM WAGE RATES COME INTO FORCE ON THE 1 OCTOBER 2009
· £5.80 an hour for adult workers (workers aged 22 and over)
· £4.83 an hour for workers aged 18 to 21 inclusive
· £3.57 an hour for young people (workers aged 16 & 17
The Government has decided NOT to extend statutory maternity pay (SMP) from 39 to 52 weeks as planned in 2010. A new date for extending SMP had not yet been set due to financial restraint in the current economic climate.
However, the Government has confirmed their intention to allow parents to share up to six months parental leave after the baby's first six months, which will come into force on 3rd April 2011. The new rights will allow mothers returning to work after six months maternity leave to transfer their unused six months' leave to their partner.
Fathers are currently entitled to a maximum of a fortnight's paternity leave, will have a statutory right to up to three months' paid (SPP) and three months' unpaid leave. Gay couples will also be able to share maternity leave.
INCREASE IN PAY FOR APPRENTICES
From 1 August 2009 the national minimum wage for apprentices increased from £80 to £95 per week.
STATUTORY REDUNDANCY PAY IS SET TO INCREASE FROM 1 OCTOBER 2009.
The maximum statutory limit for a week’s redundancy pay will increase to £380 with effect from 1 October 2009. Employees with at least two years’ continuous service qualify for a redundancy payment.
The entitlement is as follows:
For each complete year of service until the age of 21 - half a week’s pay
For each complete year of service between the ages of 22 and 40 inclusive - one week’s pay
For each complete year of service over the age of 41 - one and a half weeks’ pay.
The maximum service to be taken into account in calculating redundancy is 20 years. Therefore, the maximum statutory payment cannot exceed £11,400 (30 weeks’ pay).
PENSION CHANGES AHEAD
Under provisions contained in the Pensions Act 2008 employee pension enrolment and employer contributions are to be made compulsory.
These provisions, which are due to come into force in 2012, cover the automatic enrolment of qualifying workers into a qualifying workplace pension scheme and a duty on the employer to make contributions to such a scheme. A universal personal account scheme is being created to ensure that employers comply with these duties.
The main details of the scheme are:
Automatic enrolment of eligible employees aged between 22 and state pension age earning over £5,035 per annum (unless the employee opts out).
Employer contributions of 3% on a band earnings, initially set as £5,035 - £33,540
Employee contributions of 4%, with an additional 1% funded by the government in the form of tax relief.
Both employer and employee contribution levels will be phased in over three years.
The Pensions Regulator will have the power to penalise employers who do not comply with the regime.
Consultations and regulations will be issued in the lead up to the introduction of the legislation.
JUST A REMINDER ………...
NEW NATIONAL MINIMUM WAGE RATES COME INTO FORCE ON THE 1 OCTOBER 2009
· £5.80 an hour for adult workers (workers aged 22 and over)
· £4.83 an hour for workers aged 18 to 21 inclusive
· £3.57 an hour for young people (workers aged 16 & 17
You should seek specific advice before taking any action based on the information contained in this document.While every care has been taken in compiling these notes, FirstHR cannot be held responsible for any errors or omissions; the notes are not intended to be a substitute for specific legal advice.
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