Further employment law changes
October 2009 sees further employment law changes which include rises in the national minimum wage, the increase of the maximum weekly amount for calculating unfair dismissal and redundancy payments, tips not being permitted to be taken into account in assessing whether the national minimum wage is being paid and the introduction of a centralised vetting system for people working with children and vulnerable adults.
NATIONAL MINIMUM WAGE:
From 1 October 2009 the national minimum wage (NMW) hourly rates increased. The main rate goes up from £5.73 to £5.80. The development rate (for workers aged 18 to 21) goes upon from £4.77 to £4.83. The youth rate (for 16 and 17 year olds) goes upon from £3.53 to £3.57. Nearly 1 million workers will be affected by these increases but the net cost to employers is considered negligible as the rises are so modest.
INCREASE OF MAXIMUM WEEKLY AMOUNT:
From 1 October 2009 the maximum weekly amount for calculating unfair dismissal and redundancy payments increases from £350 to £380. An annual adjustment normally takes place in February each year (in line with the RPI) but under the current RPI such adjustment would most likely have led to the limit remaining the same or falling to £340. The limit of £380 will remain in place until February 2011. Accordingly, employers will be adversely affected by this increased level of termination liability.
TIPS NOT TO FORM PART OF NMW:
From 1 October 2009 there are changes to the way that tips, service charges and tronc payments are treated for NMW purposes. Troncs are where tips are pulled centrally and then distributed by an employee appointed as ‘troncmaster'. Accordingly, employers will not be permitted to take into account any gratuity payments paid to workers when assessing whether the NMW is being paid. This is irrespective of whether tips are paid directly to the workers, through the employer's payroll or through a troncmaster.
CENTRALISED VETTING SYSTEM:
Under the Safeguarding Vulnerable Groups Act 2006 which comes into effect on 12 October 2009 a centralised vetting system will be introduced for people working with children and vulnerable adults. The new Independent Safeguarding Authority (ISA) will operate from 12 October 2009. Both employees and volunteers will need to apply to register with the ISA and will be assessed using data gathered by the Criminal Records Bureau. As a result, only ISA registered persons can undertake regulated activity which involves frequent or intensive contact with children or vulnerable adults. Employers who employ an unregistered person are liable to imprisonment or a fine of up to £5,000. Registration and checking will become mandatory in November 2010. This will put more pressure on employers in relation to their recruitment procedures to ensure that the necessary checks are carried out and to prepare to vet all their existing staff. Likewise employers will need to put in place policies governing the information which will be provided to the ISA.
Charles Terry, Associate
This publication provided general information and does not constitute legal advice. A Copyright in the content of this publication is owned by Woolley Bevis Diplock LLP. It is believed to be correct as at 1 October 2009 but is subject to change. To be sure you have the most up to date information, please contact us.
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