In this news round up we look at the new rates for the national minimum wage, forthcoming legislation on tips and the national minimum wage, the consultation on the new "fit notes" and recent confirmation that the increase in the maximum week's pay for calculating statutory redundancy payments will take effect in October.

National Minimum Wage
The Government has announced that with effect from 1 October 2009 the standard rate of the national minimum wage will increase from £5.73 to £5.80. The rate for 18 to 21 year olds will rise to £4.83 and for 16 to 17 year olds to £3.57.

Minimum wage and tips
The Government has announced that it will introduce legislation, to come into effect on 1 October 2009, to prevent tips being used to top up wages to meet the national minimum wage. The Government also proposes to consult on a Code of Practice on the treatment of tips.

"Fit note" consultation launched
The Department for Work and Pensions has unveiled a medical "fit note" to replace current sick notes. There will be a twelve-week consultation, ending on 19 August 2009 on its design. The "fit note" will focus on the work that an ill person is able to do, rather than what they are unable to do, with the aim of encouraging an earlier return to work.

Redundancy pay to increase from October
The Government has published a final impact statement in relation to the budget proposal to increase redundancy pay. The Statement confirms that the one-off increase from £350 to £380 in the maximum week's pay that can be taken into account for the purposes of calculating statutory redundancy pay will take effect from 1 October 2009.

The increase will also apply to other compensation payments that are calculated by reference to a week's pay, including the basic award in unfair dismissal claims, compensation for failure to comply with flexible working procedures, compensation for failure to allow an employee to be accompanied to disciplinary or grievance hearings or to give a statement of employment particulars under the Employment Rights Act and the various payments made to employees by the Redundancy Payments Office in the event of their employer's insolvency.

Employers will be pleased to note that the usual annual increase will be suspended in 2010, so that the next increase in a week's pay will not take place until February 2011.

11 June 2009

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