On 1 October 2006 the Employment Equality (Age) Regulations comes into force. The scope is wide-ranging, effecting recruitment, promotion & training opportunities, as well as long service payments and redundancy payments. Payroll departments, no matter how large or small need to be aware that these regulations will potentially have an immediate effect on the payroll, and check that they can update their current payroll system in order that it is compliant with the changes effective from that date. I've outlined below a synopsis of what the regulations entail:
Removal of the lower age limit for the payment of statutory payments
Under 16's will be classed as employees and will then be entitled to Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP) and Statutory Sick Pay (SSP), even though they are not currently liable to pay National Insurance contributions. For the payment of SMP and SPP, the removal of the lower age limit will apply to all women with a baby due on or after 14 January 2007. This may mean that average earnings need to be calculated from as early as July 2006. The lower age limit is also being removed in respect of Statutory Adoption Pay (SAP), however as UK regulations prevent anyone under the age of 21 from adopting this aspect is not an issue. As SSP is not currently payable for under 16's prior to 1 October, even if they are midway through a Period of Incapacity for Work (PIW), their entitlement will only commence from 1 October and waiting days will need to be served from the first qualifying day after that date, and all other current rules followed.
Removal of the upper age limit for the payment of SSP
Employees aged 65 or over will be entitled to receive SSP (there is no current upper age restriction for SMP, SAP and SPP). Prior to 1 October there is no entitlement to SSP if the employee is aged 65 or over, unless they reach their 65th birthday midway through a PIW, in which case the entitlement continues until the end of the absence, or linked absences. From 1 October if an employee aged 65 or over is absent which does not link to a previous PIW, and if all other qualifying conditions are met (e.g. average earnings exceed the Lower Earnings Limit for NICs), then they would have an entitlement to receive SSP. If the employee has been off sick previously which would link to the new period of sickness, then the qualifying conditions as at the start of the first linked PIW must be reconsidered (excluding age). Where an employee is off sick straddling 1 October again the qualifying conditions as at the start of the PIW will need to be reconsidered, and if the employee was excluded on the grounds of age only, then waiting days will be served from the first qualifying day after that date and SSP will become payable.
With the 1st October fast approaching, time is of the essence. If you haven't already done so, it would definitely be a good idea to check your systems now!
Pip Trowles
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