Posted: Fri Jun 30, 2006 3:48 pm Post subject: Employment Equality (Age) Regulations 2006
Does anyone know if there is a single source where ALL aspects of UK payroll affected by the above Regulations are defined?
As a (simple) example - Statutory Redundancy Pay:
1. There seems to be agreement that the 'Entitlement' rules change on 1st October - e.g. employee's continuous service start date will be used (even if he/she is not aged 18 at that date); and entitlement does not cease at age 65 (or employer's normal retiring age).
2. However there does NOT seem to be agreement as to how calculation is affected. Some sources say that the 'reducing pay' (due if the employee is between 64 - 65 at the relevant date) will be removed, as will the 'rate factor' (when calculating pay for years of service within age bands) ... whilst other sources say that these items will be retained!
Of course there are rather more complex, and more frequently used, areas that will be affected - e.g. SAP, SMP, SPP, SSP - as well as NICs etc
Advice on where to go for an official & single set of consistent answers(instead of trawling through multiple web-sites and magazines) would be most welcome.
Joined: 13 Feb 2006 Posts: 220 Location: Hampshire, United Kingdom
Posted: Mon Jul 03, 2006 9:07 am Post subject: Employment Equality
Hugo,
Well said! Like you I know of no single place to go for information (rather than opinions) about each individual issue in life which will be affected by the October changes.
And it is not just payroll, is it? There are just so many "opinions" around, like you can continue targetting sales to certain age ranges but you cannot purchase items simply for a particular age range of employee.
I have no doubt Ian is working on a comprehensive document which will give us all the relevant signposts, or even the intimate detail but that wont be enough either because we all know that whilst age related differences in redundancy calculations, sickness and holiday pay entitlements and the like are apparently legal I doubt if they will survive the first round of tribunals brought by younger members of staff who dont feel they should have to wait to enjoy such benefits.
Whoever decides to compile such a list will have to accept they are taking on a constantly moving target. I just wish I had any faith that the new regulations will mean that employment for those of us in the upper age ranges will become easier and fairer, because I have to say that I have no such faith!
Posted: Thu Jul 06, 2006 8:02 am Post subject: Age Equality Regulations
Ian W is right, Ian C is working on detailed guidance on this - the trouble is, it is a set of training course notes so it will only be available through the training company - I can put you in touch!
Time is a problem and this is a big subject. Let's see what I can cover in brief - just the payroll-related changes:
SMP, SAP, SPP, SSP - the lower age limit (16) goes,
- for SMP and SPP for a birth, where a woman’s expected week of childbirth begins on or after 14 January 2007
- for SAP and SPP for adoption, where notification of matching with a child is made on or after 1 October 2006, or a child is placed for adoption on or after 1 October 2006 (meaningless change - no adoption possible under age 21!)
- for SSP, where (1) PIW begins on or after 1 October 2006, or (2) absence begins before and continues after 1 October 2006.
In the second of these situations, no PIW can form before 1 October 2006, so waiting days are first three qualifying days on or after 1 October 2006. Relevant period for average earnings ends on last payday before the start of the PIW.
SSP - the upper limit (65) goes where (1) PIW begins on or after 1 October 2006, or (2) absence begins before and continues after 1 October 2006.
In the second of these situations, no PIW can form before 1 October 2006, so waiting days are first three qualifying days on or after 1 October 2006. However, the relevant period for average earnings ends on last payday before the start of the absence, not the PIW.
Also, the linking rules apply. If there had been an earlier absence that would have linked to an absence that straddles 1 October, or that starts on or after 1 October, and
1 - if that absence would have been a PIW but for the upper age limit, but the employee would not have qualified for another exclusion reason, the new PIW is treated as linking to the earlier absence and no SSP is due for the new absence.
2 - if that absence would have been a PIW but for the upper age limit, and the employee met all of the other exclusion reasons and would therefore, if it were not for the upper age limit, have been paid SSP, but does not meet one or more of the exclusion reasons for the new absence, SSP is still payable for the new absence.
Got that?! I am spending several pages in the course notes explaining all of that. There are no such linking implications for SSP with the removal of the lower age limit.
That's all I have time for this morning, more about NMW and statutory redundancy pay to come. _________________ Ian Congreave, PayPerShop owner
Posted: Mon Jul 10, 2006 7:08 am Post subject: Age Equality Regulations and the National Minimum Wage
Another instalment. The Regulations provide a specific exception for the NMW and age-related wage bands.
In principle, if an employer makes use of the NMW age-related rates, the practice is discriminatory - different rates of pay apply for people of different ages - but the legislation says that that is okay, as long as conditions are met.
I had to look at lots of worked examples to see how the rules work, but it boils down to two fairly simple tests. You take any two rates of pay in a particular set of age bands and ask
1. is the NMW rate for the age for the lower rate different to the NMW rate for the age for the higher rate? and
2. is the lower of the two rates not more than the adult rate of the NMW? (£5.05 currently, £5.35 from October 2006)
Note that the first test is not a comparison of the two rates, but a check as to whether they are different because the NMW has different rates for the particular ages.
Trying out the tests reveals their two key objectives:
1. age-related wage rates are only exempt if the age bands mirror the NMW age bands. In other words, you can have one rate for school leavers up to age 17, another for 18 to 21 year olds, and an adult rate from 22. This sounds as if it could be a problem for employers who have 21 as the adult rate - and it is. If you try out some examples, you will see that the rules are met if you use 18 as the adult rate. It is also a problem if you have different rates within each of the three NMW age bands. But try out some examples to see the effect.
2. the exemption is lost as soon as the rates below the your adult rate exceed the adult NMW rate.
If the exception does not apply, the employer must either
1. change the structure so that it does apply - probably not an option, or
2. start thinking about how the structure can be justified objectively - probably not possible.
Problem! _________________ Ian Congreave, PayPerShop owner
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