Employment: Legal Basics

Information correct at and last amended on: 30th October 2017

National Living/Minimum Wage

The national living wage will apply for all workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under.

  • Workers aged 25 and older  - £7.50 hourly 
  • Workers 21 to 24 years - £7.05 hourly
  • Workers 18 to 20 years - £5.60 hourly
  • Workers 16 to 17 years - £4.05 hourly
  • The apprentice rate, for apprentices aged 16-18 or 19 or over and in the first year of their apprenticeship - £3.50 

Holiday Entitlement & Holiday Pay

There is a minimum right to paid holiday.  An employer may offer more than this but in any event, the main things to consider are: 

  • The annual leave entitlement for full time workers, i.e. 5 days per week is 28 days p.a.
  • If working part-time, an employee is entitled to the same level of holiday pro-rata
  • Bank and Public Holidays can be included in the minimum entitlement
  • Holiday pay is payable at the employees' standard pay rate
  • You continue to be entitled to holiday leave throughout ordinary and additional maternity / paternity / adoption leave

Bank and Statutory Holidays in England and Wales total 8 in number and they are:  

  • New Year’s Day
  • Good Friday
  • Easter Monday
  • Early May Bank Holiday
  • Spring Bank Holiday
  • Summer Bank Holiday
  • Christmas Day
  • Boxing Day

Northern Ireland - there are currently 10 permanent bank holidays - the same 8 as in England and Wales, plus St Patrick's Day and the Anniversary of the Battle of the Boyne.

Scotland - some dates are also different. There are statutory bank holidays across the whole of Scotland, but other public or local holidays are determined by local authorities, based on local tradition. Since 2007, St Andrew's Day has been an alternative, voluntary public holiday, which can replace an existing local holiday.
Businesses and schools are not necessarily closed on Scottish bank holidays and the Scottish banks follow the English and Welsh bank holidays for business reasons.

Maternity/Adoption Pay

  • Statutory Maternity Pay (SMP) / Statutory Adoption Pay (SAP) is paid for 39 weeks
  • Pay rate for the first 6 weeks of SMP / SAP: 90% of the employee's average weekly earnings
  • Remaining 33 weeks of SMP / SAP: £140.98 or 90% of average weekly earnings, whichever is less

Qualifying conditions: related to earnings level, length of service, time limits on notification, medical evidence of pregnancy or documentary evidence of matching for adoption. 

Shared Parental Leave

Eligible parents can share up to 50 weeks of leave and up to 37 weeks of Statutory Shared Parental Pay (£140.98 per week) between them.

Paternity Pay

  • Ordinary Statutory Paternity Pay (OSPP) is paid for a maximum of 2 weeks
  • Weekly rate is £140.98 or 90% of average weekly earnings, whichever is less

Qualifying conditions: employee must have been employed by the company for at least 26 weeks up to the end of the qualifying week; employee must continue to work for the company right up until the baby is born.  Slightly different rules apply in relation to adoption. 

Flexible Working

From 30 June 2014, all employees have the legal right to request flexible working - not just parents and carers.  This is known as "making a statutory application".  Employees must have worked for the same employer for at least 26 weeks to be eligible.

Statutory Sick Pay

  • Statutory rate: £89.35 per week You need to qualify for SSP and have been off work sick for 4 or more days in a row (including non-working days).

Tribunal Compensation Limits

  • Maximum limit on a week’s pay (used to calculate redundancy pay and basic / additional awards):  £489
  • Maximum Unfair Dismissal Compensatory Award:  £80,541
  • Maximum Breach of Contract Award:  £25,000
  • Employment tribunals can now levy a financial penalty of up to a maximum of £5,000 on employers found to have breached an employee’s legal rights

Employment Tribunal Claims

Early conciliation through ACAS was introduced on 6 April 2014.  Claimants must now send details of their dispute to ACAS who will attempt conciliation and settlement before the claimant can initiate an employment tribunal claim.

Pension auto-enrolment figures

Under the Pensions Act 2008, every employer in the UK must put elligible staff into a pension scheme and contribute towards it.

Pensions contributions are calculated on "qualifiying earnings" between £5,876 - £45,000 (at Octobter 2017).

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