Changes to employment legislation from April 2009

31 March 2009

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A number of important changes to regulations will come into force on or around next month's common commencement date - 6 April 2009. These include several changes to employment law that you must be aware of if you employ people. Read on to find out how these changes will affect your business.

National Minimum Wage (NMW)

Employers who pay their workers less than the NMW will face a penalty of 50 per cent of the total underpayment (for periods starting on or after 6 April 2009). However, this penalty is subject to a minimum of £100 and a maximum of £5,000. Employers who comply fully with the notice of underpayment within 14 days of service will receive a discount of 50 per cent.

Workers will be entitled to have arrears of wages repaid at current rates and these will take into account the length of time arrears have been outstanding.

The NMW is currently £5.73 an hour for adult workers aged 22 and above, and £4.77 for workers aged 18 to 21. The rate for those under 18, but above compulsory school age is £3.53 an hour.

Changes to Statutory Payment rates

The following changes to Statutory Payment rates will take place at the beginning of April:

The standard weekly rate of Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay will increase from £117.18 to £123.06 for payment weeks starting on or after 5 April 2009.
The weekly rate of Statutory Sick Pay for days of sickness absence commencing on or after 6 April 2009 will increase from £75.40 to £79.15.
From 6 April 2009 the lower earnings limit for National Insurance Contributions (NICs) will increase from £90 per week to £95 per week. The upper earnings limit for NICs will increase from £770 per week to £844 per week and the primary and secondary thresholds for Class 1 NICs will increase from £105 to £110 per week.

Increased holiday entitlement

The minimum amount of statutory holiday entitlement will increase to 5.6 weeks per annum (28 days for those who work a 5 day week) on 1 April 2009. This includes provision for bank holidays.

To calculate holiday entitlement for part-time employees whose leave year starts after 1 April 2009, multiply 5.6 weeks by the amount of days per week that they work.

From 1 April 2009, the minimum entitlement will be capped at 28 days.

Flexible working regulations

New regulations will be introduced on 6 April 2009 to improve the work-life balance for employees by extending the right to request flexible working to parents of children aged 16 or under.

If you have any employees with a child aged 16 or under, and they have worked for the organisation for 26 weeks continuously before applying for flexible working, they will have the statutory right to ask for flexible working as of 6 April 2009. This does not apply to agency workers or those in the armed forces.

Click here to read more about the extended right to request flexible working arrangements.

Changes to grievance, disciplinary and dismissal procedures

From 6 April 2009, changes will be introduced with regard to how disputes will be handled in the workplace. On this date the Employment Act 2002 (Dispute Resolution) Regulations 2004 will be repealed and will be replaced by a new framework set out in the provisions of the Employment Act 2008.

These regulations are intended to provide a more efficient system for dispute resolution, which should be easier to use and enable disputes to be resolved earlier, with less lost time, expenses and stress. This new legislation will look to achieve the following objectives:

Productivity improvements through improved employment relations.
Access to justice is provided for both employer and employee.
Reducing the cost of resolving a dispute.
A dispute is resolved in the shortest possible time before it escalates into a bigger issue.

For a full explanation of the new rules regarding grievance, disciplinary and dismissal procedures, plus the new Acas Code of Practice, click here.

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Changes to employment legislation from April 2009

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