Statutory Rate Changes
From 1 February 2011
The maximum compensatory award for unfair dismissal will increase from £65,300 to £68,400.
The limit on a week`s pay will increase from £380 to £400 (gross). This is the sum currently used in redundancy payments and unfair dismissal awards.
From 6 April 2011
The D1 tax code will be introduced where a tax payer has a second and subsequent employment income liable to tax at 50%. The new code will be incorporated into P9 forms for Annual Coding prior to the start of the tax year on 6 April 2011.
Employers’ national insurance thresholds increase by £21 per week above indexation however their national insurance contributions increase by 1%.
Employees’ national insurance threshold increases by £570 although National insurance contributions increase by 1%. The personal allowance for income tax for basic rate tax payers under the age of 65 is increased by £1,000
From 11 April 2011
Statutory Maternity, Paternity and Adoption Pay will increase from £124.88 to £128.73 per week.
Statutory Sick Pay will increase from £79.15 to £81.60 per week.
Default Retirement Age Abolition Draft Legislation
It appears that if you blink employment law changes these days. Whilst the government aims to simplify legislation for employers such as delaying The Bribery Act and The Right to Request Time off for Study and Training (under 250 employees) the draft legislation for the abolition of the Default Retirement Age is proving confusing.
The following aspects contradict previous guidance issued:
The employer can give between 6-12 months notice of retirement prior to 6 April 2011 to those employees who reach the age of 65 on or before 30 September 2011.
This raises the question, can the retirement happen up until April 2012?
What happens to those employees who are over 65 between April 2011 and 30 September 2011 as they are not mentioned?
These points may be drafting errors in the legislation and until it is clarified we advise a wait and see approach. Of course Critchleys HR and Payroll will keep you up to date with the latest developments.
Employers will welcome the notification that stopping or restricting certain benefits at the age of 65 or state retirement age – whichever is greater (e.g. life assurance, private medical cover, income protection and sickness and accident insurance) will not be unlawful.
In a Nutshell…
Upcoming Employment Legislation Change
April 2011
· 3 April 2011 - Additional Paternity Leave and Pay becomes effective.
· 6 April 2011 - The Default Retirement Age phasing out commences as notification past the 5 April 2011 will be unlawful.
· 6 April 2011 - The right to request flexible working has been extended to carers of children under 18 (it was previously for carers of children under 17).
· Annual limits on economic migration into the UK from outside the EU will come into force.