New changes to employment law

Posted 01/10/2012

There are two new changes to employment law which have effect as of yesterday, namely:Pensions auto enrolment has started for the largest employers; andNational minimum wage rates will increase for workers aged 21 and over and for apprenticesAuto enrolment

Unless you have been living in a cave you cannot fail to have seen or heard (and been mildly irritated by) the Government advertisement featuring Theo Paphitis and Karren Brady of Dragon’s Den fame lauding the “biggest shake up of UK pensions for 100 years”.

Taking a leaf out of the insurance marketeer’s handbook entitled “inertia selling” the Government hopes increase participation in the pensions market by compelling employers to automatically enrol workers who meet certain criteria into a workplace pension scheme because, as we are so frequently reminded, we are sitting on a demographic time bomb by living too long and saving too little for our retirements. 

The only way to escape being auto enrolled is filing an opt out notice with your employer within a month of commencement and, for this reason, the law requires that eligible jobholders who opted out of auto-enrolment must be re-enrolled in an automatic enrolment scheme three years after their employer’s staging date.

To ease the compliance burden, staging dates for small businesses have been delayed. Broadly speaking, employers with between 50 and 249 workers have been assigned revised staging dates running from 1 April 2014 to 1 April 2015. Employers with fewer than 50 workers have been given staging dates between 1 June 2015 and 1 April 2017. Employers should note the penalties which may be applied for failure to meet auto enrolment obligations, or inducing/persuading employees to opt out.

Perhaps best not to ask what both employer and employee National Insurance Contributions are paying for these days?

National Minimum Wage (“NMW”)

The Standard Adult Rate for those aged 21 and over is now £6.19 per hour and apprentices £2.65 per hour. NMW is enforced by HMRC or, in the agricultural sector, by agricultural wages inspectors.

Failure to pay NMW is a criminal offence and the Government is pursuing a policy of “naming and shaming” those employers who flout NMW by publishing their details as well.  Norman Lamb, Minister for Employment Relations took this step last month in respect of an employer who neglected to pay £3,361.22 in arrears. Read the full story here.