Your employee's statutory rights
By being on a PAYE scheme and having NI contributions deducted from their salary your employee has certain statutory rights, which you as an employer have a legal responsibility to adhere to. These include rights to statutory sick pay and maternity pay and leave, as well as contributions towards their state pension and unemployment benefits. In addition your employee is also entitled to annual paid leave and redundancy pay.
|Statutory Sick Pay || Holiday Entitlement|
| Statutory Maternity Pay|| Redundancy Pay|
information for domestic workers
There is a lot of confusion with regards to domestic employees and redundancy. Many people assume that because of the unique circumstances that exist between a domestic employee and their employer, they don’t qualify for redundancy pay. But providing they meet the requirements they are entitled to redundancy pay just like any other employee.
To qualify the employee must be 18 or over and have at least two years continuous employment. This means that they must have been working for the same household, without any breaks, apart from maternity, paternity, sickness and unpaid leave, for at least two years. They must also be working as an employee under an employment contract and have a PAYE scheme set up. This does not mean that they need to have a written contract, as some employers unfortunately don't provide this. They are still considered an employee working under a contract even if there is nothing in writing.
If an employer's circumstances change and they no longer have a full-time job to offer their employee and they want to employ someone on a part-time basis, the employer is required to first offer the "new" position to the existing employee. If they choose not to continue working for the employer under the new conditions they are still entitled to redundancy pay, unless they are on a fixed term contract.
The employee will also qualify for redundancy pay if their employer moves to a different part of the country, providing there is no relocation clause in the contract.
For current redundancy pay rates, please refer to the rates and thresholds page.
As long as the employee is on PAYE, they are legally entitled to these amounts; however, the employer is free to pay more than the statutory minimum at their discretion. The employer cannot claim any part of these costs back from the state. The employee does not have to pay tax on redundancy payments up to £30,000.
Please contact Stafftax if you wish to clarify any of the above points.