Employment Matters Bite Size June 2009

Legislation

Tips paid through payroll will not count towards minimum wage
In response to its consultation on service charges, tips, gratuities and cover charges, the Government has announced that it is to legislate to prevent tips from being used to top up wages in order that they meet the national minimum wage (NMW).  Despite calls from business leaders to delay implementation until the economy recovers, the change will come into effect from 1 October 2009.

Currently, the NMW Regulations 1999 provide that service charges, tips, gratuities and cover charges that are not paid to workers through payroll do not count towards the NMW.  On the other hand, when such payments are collected by the employer and paid to workers through payroll, these do count towards the obligation to meet the NMW.

In order to establish a clearer system, particularly for the benefit of workers and consumers, the Government has decided to prevent all of these different forms of tip from counting towards the NMW.

There is to be further consultation on a code of practice on tipping.
For further information follow this link

New minimum wage rates
DBERR has announced the new minimum wage rates which will apply from October 2009, dependent as ever upon a worker’s age:

Age: 22 and over 

Current rate (£): 5.73  

Rate from Oct 2009 (£): 5.80

Age:18 to 21 

Current rate (£): 4.77 

Rate from Oct 2009 (£): 4.83

Age: 16 to 17 

Current rate (£):3.53 

Rate from Oct 2009 (£): 3.57

The Government has also announced that from October 2010, the adult rate will be extended to 21 year olds, following a recommendation from the Low Pay Commission.

For further information follow this link

Consultation on the implementation of the EU Temporary Agency Workers Directive
Agency workers are to be given the same pay and conditions as permanent staff in a new step toward equal rights in the workplace.  The Government has now launched a consultation in respect of its proposals to implement the Directive on the basis of its agreement in May 2008 with the TUC and the CBI that equal treatment should apply after a temporary worker has been in a given post for 12 weeks.

Responses to the consultation must be received by 31 July 2009.

For further information follow this link