Forthcoming changes to employment legislation
National Minimum Wage
On 1 October 2012, the main rate for the National Minimum Wage increases from £6.08 to £6.19 per hour. The ‘youth development’ rate for workers aged 18 to 20 and rate for workers aged 16 and 17 stay the same at £4.98 and £3.68 per hour respectively.
Pensions – Auto-enrolment
New pension obligations, commonly known as 'auto-enrolment', are also coming into effect on a phased basis from 1 October 2012, initially for the largest employers with 120,000 or more employees. Small and medium sized employers will follow over the next six years.
Under auto-enrolment, employers will have to auto-enroll eligible employees, and make mandatory employer contributions, into a qualifying workplace pension scheme. From their staging date, employers must auto-enroll eligible employees into a pension scheme when they reach the income tax threshold but contributions will kick in only from the employee threshold for national insurance contributions.
Employers will be able to operate a three-month postponement window for all employees (i.e. newly eligible existing employees and new employees), so that employees on short-term contracts do not need to be auto-enrolled in a pension scheme, although they will be able to opt in voluntarily during the postponement period.
In order to find out their staging date, an employer needs to know:
• how many people are in the employer’s PAYE scheme
• the employer’s PAYE reference.
Further information and auto-enrolment staging dates can be found on the Department of Work and Pension website at:
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific