News

A number of changes to Employment Law will come into force this October. These include an increase in the rate of Statutory Redundancy Pay, an increase in the National Minimum Wage Rate, the exclusion of tips in the calculation of the National Minimum Wage and the introduction of a new vetting system for those who work with children and vulnerable adults.

Implications

Employers will need to ensure that those with responsibility for administrating pay in their organisations are aware of the changes to Statutory Redundancy Pay and the National Minimum Wage. Employers who employ staff or manage volunteers who work with children or vulnerable adults (such as schools, nurseries or adult care homes) need to be aware of the new vetting and barring scheme.

Details

Increase in Statutory Redundancy Pay (SRP)

The increase in SRP was announced in the 2009 budget (see Howes Percival Newsflash 23rd April 2009). The increase will come into effect on the 1st October 2009.

The maximum limit of a week's pay for SRP purposes will increase from £350 to £380. This increase will also affect the calculation of other payments such as the Basic Award for unfair dismissal.

As the increase in SRP is, unusually, taking place in October, there will not be an increase to the level of SRP in February 2010. This means that the new limit of £380 will remain in place until February 2011.

National Minimum Wage (NMW)

There are two changes to the NMW both of which come into force on the 1st October 2009.

The first is the proposed change to the NMW Regulations which will make it unlawful for employers to include tips, service charges, gratuities and cover charges in the calculation of the NMW.

However we still await details of a 'Best Practice Guide' on tipping which the government, following public consultation on this issue, indicated would be published before the Regulations are to take effect.

The second change is the annual increase in the NMW rates. The new National NMW are:

  • Standard rate (for workers over 22) - £5.80 per hour
  • Development rate (for workers aged between 18 and 21) - £3.43 per hour
  • Young Workers rate (for workers aged 16 to 18 who are not apprentices) - £.3.57 per hour

The accommodation offset will rise from £4.46 per day to £4.51.

New Vetting and Barring Scheme

This comes into effect on the 12th October 2009. The three current barring lists, Protection of Children Act (POCA), List 99 and Protection of Vulnerable Adults (POVA), will be replaced by two new barred lists to be administered by the Independent Safeguarding Authority (ISA) rather than different government departments.

Employers can check these lists as part of an Enhanced CRB check as standard CRB checks will no longer reveal information held on the old or new barred lists. However the new system will not replace a CRB check.

The new scheme will be wider than the current system as it will include volunteers as well as employees and anyone who comes into contact with children and vulnerable adults, including school catering staff and caretakers. More information about the new scheme can be obtained on the ISA website www.isa-gov.org.uk.