Basic Employment Rights

This section covers some of the basic employment rights, such as annual leave, pension, minimum wages, and other benefits.

Annual leave

One of the fundamental basic employment rights is annual leave. The minimum entitlement is 20 days of annual leave plus bank holidays (usually 8 days per year) which is a minimum legal leave allowance of 28 days per year.

Sick leave

Your employer should provide details of the sick leave and sick pay policy in your employment contract. If your employer does not offer sick pay, you will be eligible for statutory sick pay (SSP), which the government pays at a rate of £116.75 a week. Employees who are off sick for more than 7 days, must provide their employer with proof of illness. You can self-certify your illness if you are ill for less than 7 days. Your employer will advise you how to do this. If you are ill before or during your leave you are allowed to take this time as sick pay.

Maternity leave

During maternity leave you are entitled to pay increases, you accrue leave, and have the right to return to work. Statutory maternity leave is 52 weeks. The first 26 weeks are ordinary maternity leave and the remaining 26 weeks are additional maternity leave. You do not have to take the full 52 weeks. Legally, you must take a minimum of 2 weeks leave after the birth or 4 weeks if you work in a factory. Furthermore, there is the option of sharing maternity leave with your partner, as shared parental leave. The earliest you can take maternity leave is 11 weeks before the baby’s due date.

You will receive statutory maternity leave pay (SMP) for 39 weeks of the 52 weeks and this is paid through payroll and is subject to tax and national insurance. The first 6 weeks of maternity pay is calculated at 90% of your average earnings at the qualifying week. The remaining 33 weeks are paid at a weekly rate of £184.03 or 90% of your earnings, whichever is lower.

Workplace pension – automatic enrolment

Employers have a legal duty to automatically enrol eligible employees in a workplace place pension. Eligible employees are those aged between 22 and state pension age earning above £10,000 a year. A minimum of 8% of earnings must be contributed to a workplace pension, with employers legally required to contribute at least 3%. Employees contribute the remaining 5% which includes 25% tax relief from the government. This means your actual contribution will be 4% of your salary. Contributions are made on a range of earnings which is currently between £6,240 and £50,270.

Your employer may be more generous and contribute more than the minimum of 3%. You can choose to contribute less than 5% as long as the total contribution remains at 8%.

Opting out

Employees have the option to opt out of a workplace pension scheme, but they forfeit the 3% employer contribution. Don’t do this as you are effectively throwing away 3% of your salary.

What is your earn less than £10,000 a year?

Employees earning between £6,240 and £10,000 have the right to opt in and join a workplace pension scheme. If you are aged between 16 and state pension age you will receive the minimum employer pension contributions. This is 3% of earnings between £6,240 and £10,000.

Earn less than £6,240 a year?

If you earn less than £6,240 a year, you can ask to join the pension scheme, but your employer does not have to contribute to it.

Automatic enrolment if you earn £10,000 a year or less | MoneyHelper

Benefits in kind

Some employers offer additional benefits as part of your remuneration package. This could be a company car, life insurance, medical insurance, gym membership, etc. Some benefits are tax-free, and some incur PAYE or benefit in kind tax. Any taxable staff benefits that haven’t been taxed through payroll, are reported on a P11D form. Employers must provide a P11D to staff who have received taxable benefits. If you receive a P11D do store it safely. In certain circumstances, your tax code will be adjusted to allow for the collection of the tax on benefits, or you may pay the additional tax liability via a self assessment tax return.

Calculate your daily and hourly rate of pay:

To calculate your daily rate of pay, divide your annual pay by 260 days. Your hourly rate of pay is your daily rate of pay, divided by the number of hours you work a day, usually 7 to 8 hours a day. Don’t include your lunch break in the hours, as you generally aren’t paid for this time.

Minimum wages

The government sets minimum hourly wages that companies must pay staff. To check the current rates, click on the link below:

National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)