Changes to the National Minimum Wage Rates
We would inform you that the National Minimum Wage Rates are changing.
From 1st October 2011 the governments new statutory minimum rates of pay for employees will be:
- Main (adult) rate for workers aged 21 and over - £6.08 per hour
- Development rate for workers aged 18 - 20 inclusive - £4.98 per hour
- Young workers rate for 16 and 17 years olds* - £3.68 per hour
- *applies to 16 and 17 years olds above compulsory school leaving age
- 16 -18 year old apprentices of government approved training schemes will be due to a minimum 'apprentice minimum wage' of £2.60 per hour
Compulsory pensions
New pensions law due to be introduced from October 2012 onwards will require employers to have pension schemes for their employees and it will be mandatory for both employers and employees to make contributions into them. Only one-man companies will be exempt, otherwise every employer who has workers in the UK will be required to enroll its workers in a pension scheme. There will be some exceptions for workers aged under 22, over state retirement age or paid less than £7,475. Employees would have to take an active decision to opt out and any employers found to have encouraged their workers to opt out may incur financial penalties.
The largest employers (120,000 or more employees) will be forced to sign up first. Those who employ less than 50 workers will be required to take part in the scheme from a date to be decided sometime between 2014 to 2016. The level of compulsory contributions will be imposed gradually over five years to 2017 with employers and employees contributions totaling 8% of the workers earnings, including tax relief given on the employees' contributions. The employer will be forced to contribute a minimum of 3% of the workers' earnings.
Employers can use an existing pension scheme, set up a new one, or use the new low cost pension scheme established by the Government called NEST (National Employment Savings Trust). Where an existing scheme is used the employer will have to certify that it meets all the requirements for compulsory pension saving. Every employer will also be required to register with the pensions regulator.
For more information regarding the national minimum wage or compulsory pensions, call us
01623 752211