The following changes have recently been introduced:

Statutory Pay Increases

SMP is paid for 39 weeks of maternity leave as follows:

• For the first 6 weeks, SMP is paid at 90% of the employee’s normal weekly salary.
• For the remaining 33 weeks, SMP is paid at either the lower of 90% of the employee’s normally weekly salary, or the “Prescribed Rate”.

From 7 April 2013, the Prescribed Rate has increased from £135.45 to £136.78 per week.

The Prescribed Rate for Statutory Paternity Leave, Statutory Adoption Leave and Maternity Allowance has similarly increased to £136.78 per week.

From 6 April 2013, statutory sick pay increased from £85.85 to £86.70 per week.

Collective Redundancy Consultation

From 6 April 2013, where an employer proposes to dismiss 100 or more employees at one establishment, the following changes apply:

• The collective consultation period (the minimum period before the first redundancy can take effect) has been reduced from 90 to 45 days after a collective consultation begins;
• The period for lodging a form HR1 has similarly been reduced from 90 to 45 days before the first redundancy takes effect;
• Employees on fixed-term contracts “which have reached their agreed termination point” are excluded from collective redundancy consultation obligations. However, beware, as they will still be able to claim unfair dismissal if they have the required length of service, so individual consultation will often be advisable.

ACAS has published new guidance on collective redundancies reflecting these changes. The guidance is aimed at employers, and sets out the legal framework and best practice for collective redundancy consultation. See http://www.acas.org.uk/media/pdf/c/n/How-to-manage-collective-redundancies.pdf

PAYE “real time” reporting to HMRC

From 6 April 2013 most employers will have to provide HMRC with details of payments made to employees “on or before” the date the payment is made, or in other words, at the time of each payment. Previously such information only had to be provided once a year in the employer’s annual tax return. The change is therefore being referred to by HMRC as “real time” information (“RTI”). Employers will need appropriate payroll software in order to send the information electronically to HMRC at the time payments are made. These reports will be known as full payment submissions (FPS). HMRC has confirmed that real-time information will apply to internationally mobile employees that have a UK tax and national insurance liability even if the payment is made by an overseas employer.

As a temporary transitional measure, the government has agreed that until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).

For more information see http://www.hmrc.gov.uk/payerti/getting-started/index.htm.

Government Announcements

Minimum Wage Increases from October 2013:

The government has announced that from 1 October 2013, the minimum wage will increase as follows:

• the adult rate for 21 year olds and over will increase to £6.31 an hour;
• the rate for 18-20 year olds will increase to £5.03 an hour;
• the rate for 16-17 year olds will increase to £3.72 an hour;
• the apprentice rate will increase to £2.68 an hour.

Employment Allowance – National Insurance Reduction from April 2014

In his Budget Speech on 20 March 2013, the Chancellor announced that from April 2014 there would be an “employment allowance” for all businesses.  The proposal is that all companies will not have to pay the first £2,000 in employer national insurance contributions.