Statutory payments

Minimum Wage

The national minimum wage applies to nearly all workers and sets the lowest hourly rates which must be paid. The rates set are based on the recommendations of the independent Low Pay Commission. Rates from October 2007:

Main (adult) rate for workers aged 22 and over: £5.52 per hour.

Development rate for workers aged 18-21 inclusive: £4.60 per hour.

NB: The development rate can also apply to workers aged 22 and above during their first 6 months in a new job with a new employer and who are receiving accredited training.

Rate for 16 and 17 year olds (above compulsory school leaving age): £3.40 per hour.

Statutory Sick Pay

The standard rate of statutory sick pay will increase on 6 April 08 from £72.55 to £75.40 per week. The rate of Statutory Sick Pay is worked out according to the employee's normal weekly earnings. See booklet CA30 or CA35 or http://www.hmrc.gov.uk/calcs/ssp.htm The earnings threshold for these payments is £87 per week. It is not payable for the first 3 qualifying days of the illness, but is payable thereafter up to 28 weeks. After that time an employee will have to claim state sickness benefit. If an employee does not qualify for statutory sick pay they may still qualify for sickness benefit from the DSS. Statutory sick pay will be paid by the employer and reclaimed from the state.

Statutory Maternity Pay (SMP) and Paternity Pay (SPP)

The standard rate of statutory maternity, paternity and adoption pay will increase on 6 April 08 from £112.75 to £117.18 per week. SPP is paid for two weeks at the standard rate or 90% of average weekly earnings if this is a lower amount. SMP is a weekly payment made by the employer who can claim it back and can recover money in advance of making SMP payments. Small employers can recover 100% of payments plus an element of compensation. A woman is eligible if she has been employed for 26 weeks up to 15th week before the due date and her average earnings are above the qualifying threshold, currently £87.

SMP can be paid for up to 39 weeks. The first 6 weeks are paid at 90% of the woman’s average weekly earnings with no upper limit. The remaining 33 weeks are paid at the standard rate or 90% of the woman’s average weekly earnings if this calculation results in a lower amount. Details of qualification and help with calculation are available at: http://www.hmrc.gov.uk/calcs/ssp.htm

Redundancy payments

The amount of a statutory redundancy payment depends on the employee’s age, length of service, and the amount of a week’s pay. For each year of continuous service:

Up to age 21 Half a week’s pay
Age 22-40 One week’s pay
Aged over 40 One and a half week’s pay

The maximum payment is 30 weeks’ pay, and the maximum amount of a week’s pay that may be used to calculate a payment is £330. The limit changes annually in line with the Retail Prices Index (up or down) as appropriate. An employee must be at least 20 years of age because one qualification for a redundancy payment is at least two years continuous service since the age of 18. Further information is available on the employment area of the DTI website, and a calculator appears on: http://www.dti.gov.uk/employment/employment-legislation/employment-guidance/

Unfair Dismissal

Maximum basic award for unfair dismissal (30 weeks' pay) £9,300 Minimum basic award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only £4,200 The maximum amount of a week's pay for the purpose of calculating basic or additional awards of compensation for unfair dismissal is £330. The maximum compensatory award for unfair dismissal £63,000 but there is no limit where the employee is dismissed unfairly or selected for redundancy for reasons connected with health and safety matters or public interest disclosure ('whistleblowing').

 

Contact us on 01752 692778 or email us here