News
October increase to minimum wage and statutory redundancy pay
The Government has announced that there will be an increase to both the National minimum wage and the maximum limit of a week’s pay for statutory redundancy purposes. These increases will take effect from 1st October 2009.
The increase to the National minimum wage limits are as follows:
- Adult workers (for workers aged 22 and over) increase from £5.73 - £5.80 per hour;
- Development rates (for workers aged 18-21) increase from £4.77 - £4.83 per hour;
- Young persons rate (for workers aged 16 and 17) increase from £3.53 - £3.57 per hour.
The decision made by the Government to increase the limit for statutory redundancy from £350 - £380 is in order to provide more support for individuals who are made redundant in the current economic climate but without placing employers under an unduly onerous burden.
This is a one off increase, the annual increase due to take place in February 2010 will be suspended and the new limit will remain unchanged until February 2011.
Nicola Roe (0115 9863636) is a solicitor in the employment team at Richard Nelson Solicitors. We are dedicated to providing advice of the highest quality to assist you in employment issues you may have. We understand that employment disputes can be stressful, whether you are an employee with a problem at work or an employer who is defending a claim. Our aim is to support you though the process and achieve the best possible outcome as quickly and cost effectively as possible.
Law to ban tips as contributions towards minimum wage
Tips and service charges will no longer count towards payment of the minimum wage under new laws announced by the government.
The rules, which are due to come into effect next year, will prevent employers from using tips and gratuities to top up employees’ wages so that they meet the hourly rate laid down by the minimum wage.
Announcing the new proposals, John Hutton, the Business Secretary, said that the process of tipping needs to be made more transparent.
Mr Hutton commented: “Hundreds of thousands of people in the UK have jobs in sectors where tipping is commonplace. When people leave a tip, in a restaurant or elsewhere, they expect it to go to service staff and as consumers, we’ve got a right to know if that actually happens.
“This is an issue of fairness and common sense and it’s one many people clearly care a lot about.”
Mr Hutton argued that the new regulations will protect low paid workers: “Under the current law, all workers are already entitled to receive the minimum wage. The changes we’re proposing will mean that in the future, tips cannot count towards payment of the minimum wage.
“We also want to encourage employers to make it clear how tips are distributed so that customers know where their money is going and whether or not the establishment operates a fair tipping policy.”
Currently, where tips and gratuities are given directly to workers by customers and are retained by the workers without any other party being involved, they cannot count towards the payment of the minimum wage. Where there is evidence that cover charges, service charges, tips or gratuities are paid by the employer to the worker via the payroll then the tip can count towards national minimum wage pay.
The national minimum wage for adult workers is set to increase from £5.52 to £5.73 as from October 2008, with the rate for 18-21 year olds increasing from £4.60 to £4.77, and the rate for 16 and 17 year olds going up from £3.40 to £3.53.
For more information on any issues relating to employment law, either phone us on 084 4804 4800, request a free, no-obligation call-back using the form to the right, or email us on advice@employmentlawhelp.co.uk and we will be more than happy to discuss with you the precise needs which you have.
