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Changes to Legislation in October 2012

 

There are two main employment law changes which have come into force from October 2012 –

The start of auto-enrolment, whereby employers automatically enrol workers into a qualifying pension scheme; and changes to some National Minimum Wage (NMW) rates.

Pension auto-enrolment

On 1 October 2012, the Government introduced a new law which makes it easier for employees to save for their retirement. This law requires all employers to enrol their employees into a qualifying workplace scheme if they are not already in one. Previously, many employees had failed to take up valuable pension benefits because they did not apply to join the company pension scheme. The law on automatic enrolment has been created to prevent this occurring in the future.

These new duties on an employer will be implemented over a five-year period and will be based on the employer’s size as indicated below:

As a guideline:

Companies with 250 – 349 employees, the effective date is 1st February 2014

Companies with 50 employees, the effective date is 1st April 2015

Companies with less than 30 employees, the effective date is 1st June 2015

The Pensions Regulator has provided a series of guidance notes on these workplace pension schemes, which can be downloaded from the website. However, further information will be provided in my November Newsletter or by contacting me direct during October.

Increase in NMW rates

The following rates apply to the National Minimum Wage (NMW) from 1 October 2012:

£6.19 - the main rate for employees aged 21 and over (increase)

£4.98 - the 18-20 rate (unchanged)

£3.68 - the 16-17 rate for employees above school leaving age but under 18 (unchanged)

£2.65 - the apprentice rate, for apprentices under 19, or 19 or over and in the first year of their apprenticeship (increase)

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