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Update Your Business Documents! Legal Changes For October 2008
Each year, October is usually the month when a wide variety of changes to employment, company and trading law are rolled out. Many of these of are small changes, and many more will not be applicable to your particular business, but be careful - getting caught out by the changes could lead to a serious legal headache. Companies should review the changes carefully and make sure all their legal and business documents, (including trading and employment contracts) are in line with the new regulations.
Changes to Employment Law
One of the changes to employment law is that the minimum wage has increased:
- 16 to 17 year olds must now be paid a minimum of £3.53 per hour
- 18 to 21 year olds must now be paid a minimum of £4.77 per hour
- Those over 21 must now be paid a minimum of £5.73 per hour
These increases have taken effect from October 1st, so make sure your employment contracts (and of course your workers' pay cheques!) have been updated to be in line with the new amounts.
There have also been important changes to maternity law. Previously, employees were only legally entitled to additional company benefits (such as company cars and gym memberships) for the 'standard' period of maternity leave, and these benefits could be scaled back during additional maternity leave. Now, employees can take up to a years maternity leave, and they are eligible for any available company benefits for the entire year. Note that these changes also apply to parents who have recently adopted a child (during what is called adoption leave.)
Among your business documents may be a company policy on maternity leave; make sure this is updated, and be certain that your human resources department (or a relevant member of staff) is fully aware of the changes.
Changes to Company Law
There are a number of new company laws coming into force from October, many of which will require changes to your employment contracts and company legal documents.
- New statutory duties for companies have come in concerning company directors. From October, directors must avoid conflicts of interest, declare any personal interests at stake in any piece of company business, and they must also avoid accepting any benefits from third parties.
- It is now illegal to register a company with express purpose of extracting money from an individual, or registering a company name to which another person has a "goodwill" right
- Private companies can now reduce their share capital through the use of a solvency statement
- Annual returns that are made after the 1st of October will include less shareholder information - they are now only required to provide the names of shareholders and not the addresses
- Private companies are no longer prohibited from providing financial assistance to help purchase their own shares
Changes to Trading Law
The main changes to trading law concern doorstep selling and telesales. Essentially, if a customer agrees to purchase an item over £35 in their home (from a door to door salesman or over the telephone) they have a seven day 'cooling off' period during which the purchase can be cancelled. If you are involved in door to door or telesales, make sure your business documents and trading contracts clearly specify that the customer has the right to this seven day cooling off period.
About the Author Iain Mackintosh is the managing director of Simply-Docs. The firm provides over 1100 UK legal documents covering all aspects of business from holiday entitlement to employment contracts. By providing these legal documents (with content provided by leading commercial lawyers, HR and health & safety consultants) at an affordable price, the company intends to help small businesses avoid costly breaches of regulation and legal action.
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