January 31, 2012
Employment law changes coming into effect in April 2011
12-Apr
From April 2011, a number of changes to employment law will take effect, including:
- Default retirement age. From 6 April, the default retirement age of 65 will be abolished. For information on what employers need to do to prepare for the change, how the transitional provisions work, and the circumstances in which compulsory retirement may be lawful in future.
- Equality Act 2010. A number of provisions contained in the Equality Act 2010 came into force on 6 April, including provisions relating to positive action in recruitment and promotion and public sector equality duties.
- Additional paternity leave and pay. The right to additional paternity leave will be available to parents of babies due on or after 3 April 2011 and to adoptive parents who are notified that they have been matched with a child for adoption on or after that date.
- Statutory payment rates. As from 3 April 2011, the standard weekly rates will increase
for the following payments:
- Statutory maternity pay, statutory paternity pay and statutory adoption pay: these will increase from £124.88 to £128.73 and the weekly earnings threshold will rise from £97 to £102.
- Statutory sick pay: this will increase from £79.15 to £81.60, with the weekly earnings threshold rising from £97 to £102.
- Maternity allowance: this will increase from £124.88 to £128.73, with the earnings threshold remaining at £30.
- Taxation of termination payments. From 6 April 2011, employers must use an 0T PAYE code for post-P45 payments which has an impact on the amount of income tax the employer must withhold on termination of employment.
- Migration cap. A permanent migration cap came into effect on 6 April, restricting the number of certain non-EU immigrants entering the UK to work
- Statutory maternity pay: reduction to small employers' relief from 6 April 2011. Small employers are entitled to recover 100% of their statutory maternity pay (SMP) from HM Revenue & Customs, together with an additional compensatory amount, expressed as a percentage of the statutory payment, which relates to the NICs they have paid on it. A small employer for these purposes is one whose total Class I NICs, including primary (employee) and secondary (employer) liability is at or below a set annual threshold in the qualifying tax year (currently £45,000). From 6 April 2011, the additional compensatory amount for small employers will reduce from 4.5% to 3%.
- Luxury company cars: From 6 April 2011, company cars with a list price over £80,000 will be subject to increased tax charges, when changes introduced in 2009 by the then Labour government take effect. Tax and national insurance contributions are currently paid on company cars with reference to the car's list price, with a cap of £80,000.
