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Age discrimination & statutory payments

Age discrimination & statutory payments. Ian D Brennan MSc FIPPDip Payroll Products Manager. Topics . An apology on behalf of the Welsh Assembly Age discrimination SSP SMP SAP SPP SPPB SPPA. An apology.

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Age discrimination & statutory payments

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  1. Age discrimination & statutory payments Ian D Brennan MSc FIPPDip Payroll Products Manager

  2. Topics • An apology on behalf of the Welsh Assembly • Age discrimination • SSP • SMP • SAP • SPP • SPPB • SPPA

  3. An apology In the spring legislation reviews we stated that the Welsh Assembly had not ratified the new council tax rates. Shortly after completing the CCN regional meeting in Edinburgh the Welsh Assembly decided that they were going to ratify the new rates after all. As usual Ceridian were prepared and the new rates have been introduced painlessly.

  4. Age discrimination • Regulations came into force in October 2006: • Illegal to discriminate against employees or potential employees on grounds of age • National default retirement age of 65 • From 1st April 2007 an employer must give an employee 6 months notice of an intended retirement • Cannot be forced to retire before 65 • Even after 65 employer must give an employee 6 months notice • Employers have a duty to consider requests to work past 65 • Age related pay rates under NMW still permitted

  5. Age discrimination continued • Exemptions regarding service-related pay and benefits • Most age-related aspects of occupational pension schemes are excluded • Age can be a genuine occupational qualification in limited circumstances eg acting • Employer may be able to justify direct discrimination on grounds of age in certain circumstances • Harassment related to age defined as indirect discrimination in line with other legislation • Statutory redundancy • Lower and upper age limits removed (18 & 65) • Length of service remains a factor in the calculation

  6. SSP - Statutory Sick Pay • The ‘forgotten’ statutory payment • If your OSP scheme not equal to or better than SSP must still operate statutory scheme • Must still maintain sick records in case SSP1 required (non-entitlement statement) • Average weekly earnings of at least £87 in the 8 week period before 1st day of absence. Payable at £72.55 per week • For SSP purposes week always begins on a Sunday • Non-recoverable unless… • Percentage Threshold Scheme (PTS) – SSP paid in any month greater than 13% of class 1 NIC liability in that month. Can only recover the difference • Maximum 28 weeks pay – issue SSP1 if approaching limit so can claim incapacity benefit - also for a leaver (SSP1L if requested) • http://www.hmrc.gov.uk/helpsheets/e14.pdf

  7. SMP – Statutory Maternity Pay • New rules apply for babies due on or after April 1st 2007 • MPP now 39 weeks (6 higher, 33 @£112.75 or 90%) • OML stays at 26 weeks – right to contractual benefits? • First 2 weeks after the birth still compulsory • AML 26 weeks (no service requirement) • Early return (before 26 or 52) – 8 weeks notice • KIT days (unused days can be offset for an early return) • Can optionally match the payment period – no longer needs to be multiple of whole weeks (although the total weeks must be multiple of whole weeks e.g. 38 weeks, not 38.4) • SMP can start on any day of the week

  8. SMP continued • Notification of ‘baby due date’ on MATB1 or equivalent • Contributory benefit • Although age discrimination would suggest under 16s can receive SMP, lack of contribution history disallows • Recoverable at 92% unless ‘small’ employer • ‘Small Employer’s Relief’ (SER) – annual liability for Class 1 NICs of £45,000 or less . Can claim 100% of SMP paid plus 4.5% • NB – Input for new rules only available within CPS1 & Source – not PayPoint. • http://www.hmrc.gov.uk/helpsheets/e15.pdf • This booklet also deals with SPP (Birth)

  9. Alabaster – don’t forget • Potentially any upward change that may be due which would attract Class 1 earnings is a pay rise (disregard downward movements) • From 8 weeks before QW to end of 52 week maternity leave period • So if a pay rise falls during this period you must increase and back pay the earnings related maternity pay (SMP and/or OMP) even if the rise would have occurred after the payment was made

  10. SMP and benefit entitlements • Do not forget maternity rights: • Employees entitled to continued non-cash benefits during OML • Cars • Mobile phone • Child care vouchers • Medical insurance • Etc • But employee is entitled to continued employer pension contributions during entire maternity pay period as if still working, employee contributions only can be reduced • Beware if you are operating salary sacrifice schemes, you cannot sacrifice SMP, yet the employee is entitled to continue receiving the benefit in kind.

  11. SMP & Ceridian product options Optional facilities added: HRevolution / CPS1 / CPS 2 (Source Payroll) • Period based SMP payments • New Alabaster type pay rise facilities • M741 £p increase to earnings SMP rate and recalculate • M743 % increase to earnings SMP rate and recalculate • M745 £p replace earnings SMP rate and recalculate • (M748 replace SMP earnings to date in SMP MPP)

  12. SAP – Statutory Adoption Pay • Similar to SMP except • Notification on ‘matching certificate’ from an approved adoption agency • Can be claimed by either parent (other claiming SPP) • Payable for 39 weeks but all at rate of lower of £112.75 or 90% of average earnings – no ‘higher rate’ • Only available for ‘new matches’ – therefore step-parents adopting a partner’s child(ren) disallowed • Only one period of leave available if child(ren) adopted • http://www.hmrc.gov.uk/helpsheets/e16.pdf • This booklet also deals with SPP (adoption)

  13. SPP – Statutory Paternity Pay Available for both Birth cases (SPPB) and Adoption cases (SPPA)

  14. SPP • To be eligible for paternity leave and pay (birth) employee must • Expect to have responsibility for baby’s upbringing • Be the biological father of the baby • Or the husband or partner of the mother • Partner can include a same sex partner • Fulfil a service requirement • To be eligible for paternity leave and pay (adoption) employee must • Have a relationship with the child placed for adoption and a relationship with the person with whom the child is placed • Fulfil a service requirement

  15. SPP continued • Eligible employees entitled to • 1 or 2 weeks SPP • Lower of £112.75 or 90% of average earnings • 1 or 2 weeks leave which • Must be consecutive • Must be taken within 56 days of birth or placement • Is subject to suitable notification to employer • Not later than 15 weeks before due date • State Baby Due or Placement Date • 1 or 2 weeks • Start date of leave • Recoverable at 92% or 104.5% SER • Consultation ongoing regarding 26 weeks additional paternity leave to be taken during second 6 months of child’s life – some of which may be paid if mother/partner has returned to work.

  16. Questions? Thank you, enjoy the rest of the day.

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