In addition to enrolling eligible employees in a workplace pension, employers must comply with various legislative employment terms and conditions, such as annual leave. While this is not an exhaustive list, this section covers some of the fundamentals of employment. For more comprehensive information, you can visit the ACAS website, which provides detailed guidance on employment regulations and best practices.
Acas | Making working life better for everyone in Britain
Annual leave
Employees are entitled to 20 days of annual leave plus bank holidays, usually 8 days, so a total of 28 days of leave. Annual leave is still accrued while an employee is on sick leave or maternity leave.
Maternity leave
Maternity leave is 52 weeks, with the first 26 weeks being ordinary maternity leave and the subsequent 26 weeks additional maternity leave. Although employees are not obligated to take the full 52 weeks, they must legally take 2 weeks off after the birth or 4 weeks for factory workers. Statutory maternity pay (SMP) is paid for 39 weeks through payroll and is subject to tax and national insurance. During the first 6 weeks, maternity leave is paid at 90% of average earnings with the remaining 33 weeks paid at the prevailing SMP rate (currently £172.48) or 90% of earnings, whichever is lower.
Employers can recover 92% of the SMP from HMRC through payroll. SMP is deducted from the total amount of PAYE and national insurance contributions owing to HMRC.
Employees are entitled to pay increases and they accrue leave whilst on maternity leave. Furthermore, maternity leave and pay can be shared between both parents, as shared parental leave.
Sick Leave
As a minimum, employers must offer their employees statutory sick pay (SSP). The current weekly rate for SSP is £109.40 for up to 28 weeks. It is paid via the payroll and is subject to tax and National insurance. Many employers have a company, contractual, or occupational sick pay policy that is more generous than SSP, which should be detailed in the contract of employment or statement of employment.
Compassionate leave
While there is no legal obligation to provide compassionate leave, many employers choose to offer a period of leave to employees. It is advisable to have a clear compassionate leave policy in place.
Useful resources
ACAS or the Advisory, Conciliation and Arbitration Service is a great resource for employment-related advice, such as redundancy, maternity leave, etc.
Acas | Making working life better for everyone in Britain
Employment contracts
Legally anyone classed as an employee or worker has the right to a written statement of employment. This includes the main terms of employment such as hours and rate of pay. An employment contract is broader than a written statement of employment as it may include additional employment terms.
Some employers also have employee handbooks detailing other employment terms, such as disciplinary procedures, etc.
What an employment contract is: Employment contracts and the law – Acas
Minimum wage
Employees are legally entitled to the minimum wage applicable to their age. You can find detailed information about the hourly rates on HMRC’s website:
National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)
Employee personal data
Employers are required to keep their employees’ data safe, secure, and up to date. The link below provides details on the information that employers are permitted to hold about their staff:
Personal data an employer can keep about an employee – GOV.UK (www.gov.uk)
Data protection: The Data Protection Act – GOV.UK (www.gov.uk)
Retention of employee records
- There is no specified period for the retention of employee records, however, the generally recommended time is 3 years.
- HMRC requires you to collect and keep records of pay, deductions, reports, and payments made to HMRC, tax code notices, taxable benefits or expenses, and payroll giving schemes for 3 years from the end of the tax year they relate to.
- Working time records, overtime, holiday, and other time off are to be retained for 2 years from the date they were made.
- Pension records should be held for 6 years.