Be aware of the minimum wage increase as of this month

Most minimum wage rates increased at the start of October, so if you employ anyone under 25, you may need to pay them more from this month.

The changes in full are as follows:

21-24 year olds: Increase from £6.70 to £6.95 per hour
18-20 year olds: Increase from £5.30 to £5.55 per hour
16-17 year olds: Increase from £3.87 to £4.00 per hour
Apprentices: Increase from £3.30 to £3.40 per hour

The minimum wage for over 25’s remained the same at £7.20 per hour.

It is worth noting that apprentices are entitled to the minimum wage for their age if they are over 19 and have completed the first year of their apprenticeship. For example, an apprentice aged 22 who has completed the first year of an apprenticeship is entitled to a minimum hourly rate of £6.95.

The national living wage, which applies to workers aged 25 or over, did not increase but is scheduled to in April 2017.

Verbal agreement can be legally binding

In other legislative news, a recent ruling could be of interest to businesses, particularly those looking to hire now or in the future.

In a case heard recently by an employment tribunal, an individual was awarded just over £3,000 in compensation for breach of contract after a company reneged on a verbal job offer.

The individual was twice interviewed for a job and subsequently received a phone call from the company informing him that they wished to offer him the job. The individual accepted the offer and then, via a second phone call, was informed the company in question were pleased with this acceptance.

The individual was told a written contract would be with him within a week, but it never arrived due to an individual within the company deciding he could not work with the prospective employee, both on a professional level and because of fears around skills and training.

The individual claimed breach of contract and this was upheld by an employment tribunal on the basis that the two phone calls between him and the company amounted to a job offer and an acceptance of that offer. Therefore, a contract had been entered into and had not been honoured by the company.

The tribunal determined that a notice period of one month would have been reasonable and so awarded compensation to the individual that was proportionate to the salary he accepted, amounting to just under £3,000, while his tribunal fees of £390 were compensated too.

The case is a reminder that a contract can be verbal or written, and once it is made, it must be abided by according to its terms. It could also make businesses think twice before verbally offering a job on the spot.

Learn more about rules and regulations to abide by

If you are unsure as to what your responsibilities are as a business owner, or simply want to refresh your knowledge of the rules and regulations you must abide by, visit the ‘Tax and regulation’ area of our business support webpages.

Remember that you can always get in touch with our business support team with any query that you have. Email BusinessSupport@bbf.uk.com or call 01494 568941.

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