Employment law updates from October 2009
8 September 2009
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On 1 October 2009, the rate of national minimum wage and a week's pay limit will go up and the law will change on how tips and gratuities can be paid to staff. As this date approaches fast, we remind you of these changes and your responsibilities as an employer.
National Minimum Wage
 
The National minimum wage sets minimum hourly rates that you must pay your employees. As of 1 October 2009, the National Minimum Wage (NMW) rate will increase to the following amounts:
    • £5.80 to workers aged 22 years or above 
    • £4.83 to workers aged between 18 and 21 years
    • £3.57 to workers aged between 16 and 17 years
Tips and gratuities
 
As of 1 October 2009, it will no longer be legal for employers to use tips, service charges and gratuities paid to employees via payroll to top up wages to meet the NMW.
 
Weekly pay limit
 
The limit on a week's pay – used to calculate statutory redundancy payments – will rise from £350 to £380 where the event giving rise to compensation or payment occurs on or after 1 October 2009. 
 
This increase will also affect other statutory compensation payments including:
    • compensation for non-compliance with flexible working procedures
    • the basic and additional awards for unfair dismissal
    • compensation where an employer has failed to consult a trade union or elected employee representatives when it intends to make 20 or more employees redundant
    • compensation for failure by an employer to allow an employee to be accompanied to a disciplinary or grievance hearing
    • compensation for failure by an employer to give a statement of employment particulars
    • compensation for an employer's failure to comply with its duty to notify an employee of either the date on which it intends to retire them or their right to make a request not to retire on that date.
The weekly pay limit usually increases each February in line with the Retail Prices Index. As this change is taking place in October, there will no increase in the limit in February 2010 but it will increase again in February 2011.
 
For more information on these and other legislation changes coming into force on 1 October 2009, click here.
 
Stay up to date with employment law by subscribing to the FPB's Employment Guide, updated for 2010.
 


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