Make sure you haven’t got caught out by the age discrimination regulations which came into force on 1st October.

What should you be aware of…

On 1st Ocotber, the Employment Equality (Age) Regulations 2006 came into force. Although much of the focus has been on the more mature age groups, the legislation is deisgned to stop age discrimination across the board, whether you are 16 or 65. As a result the scope of the regulations is wide-ranging, affecting everything from recruitment advertising to long-service payments.

It is one of the biggest pieces of discrimination legislation since sex discrimination, because it affects every single employee one way or another.

While HR will be leading the charge for compliance in larger companies, payroll has a role to play at smaller companies, which don’t necessarily have the expertise in other departments. A lot of pay rollers are probably saying ‘it isn’t really going to affect us’ but actually there are a lot of things in there which they do need to understand, as they are normally the people who give advice if something doesn’t seem to be right. We think people are being a bit naïve if they think it isn’t going to affect them.”

So what do you need to be aware of?

Be Aware

The changes that directly impact on payroll relate to statutory sick pay (SSP) and redundancy pay. Once the regulations come into force the lower (160 and upper (65) age limits for SSP will no longer apply. Also, although someone might not be entitled to SSP up to 30th September, after 1st October they will be entitled and their period of incapacity for work should have begun anew on that date.

Statutory redundancy pay has also had the lower and upper age limits removed, although the age-banded system remains in place.

Apart from these areas which relate directly to payroll, other areas that the regulations could impact on which pay rollers need to be aware of are pensions, benefits and rewards, holiday, retirement and recruitment, basically anything that has a time frame on it.

With benefits you need to be aware of any length of service based rewards. You can’t really offer anything that is based on more than five years service. These schemes will become obsolete because they will be deemed to be indirectly discriminatory. If your length of service requirement is under five years you are probably alright, but we would advise its clients to keep to a three-year maximum just in case. You will also need to show that the company needs to reward loyalty and that the benefit does so.

With recruitment, not only will you need to remove any questions relating to age on application forms (payroll will obviously still need this information if they join the company) but you will need to be careful what words you use on application forms.

Make sure you do not use words that could be seen as discriminating against certain groups; for instance mature could mean you are discriminating against younger applicants.

One element that you need to act on now is the company’s retirement policy, so that you are ready for anyone whose birthday means they reach retirement age shortly after the regulations come into force. The legislation includes a transition period, which says if an employee’s birthday falls between 1 October and 1 April 2007 you can give them their statutory period rather than six to 12 months notice.

If you can put your retirement process in place now then that would prove beneficial, as you would have time to give a longer period of notice and be in a less risky position after 1 October.

So in summary, the key points of the legislation are: