In the modern professional landscape, offering employee perks is essential to ensure the satisfaction and engagement of your top talent. While some of these benefits can be discretionary, there are a few that UK businesses, irrespective of their scale, must provide.
This piece sheds light on the indispensable employee benefits in accordance with UK regulations.
Which employee benefits are required by law?
Employers often provide additional perks on top of wages to motivate their staff. Yet, some benefits are mandated by UK law. These include:- Holiday pay
- Statutory sick pay
- Auto enrolment pension
- Paid leave for maternity, paternity, and adoption
Let’s dive deeper into these requirements.
Holiday pay
The holiday pay an employee receives depends on their working hours and days worked. The entitlement can be calculated based on the number of hours put in. For an accurate calculation, refer to a reliable holiday entitlement tool.For instance, an individual working a five-day week is entitled to 28 paid leave days annually (equivalent to 5.6 weeks). Including public or bank holidays in this count is at the discretion of the employer.
Statutory sick pay
Businesses must ensure they provide a base amount of Statutory Sick Pay (SSP) to their personnel, which stands at £99.35 weekly for up to 28 weeks.While many businesses opt to go above this minimum requirement, offering full salaries during sick leave isn’t a legal obligation.
Auto enrolment pension
Businesses in the UK must offer an auto enrolment pension. All qualifying employees should be registered in your pension scheme. A qualifying staff member is defined as:- Earning more than £10,000 annually
- Aged between 22 and the State pension age
- Primarily working in the UK (this includes those traveling abroad for work)
Employees wishing to not participate must actively opt out. As an employer, it's your responsibility to contribute at least 8% towards an employee's pension every month, typically split as:
- 3% from the employer
- 5% deducted from the employee’s pre-tax salary
Paid Leave for Maternity, Paternity, and Adoption
Paid leave for these life events is another statutory requirement. This includes:- Maternity: Entails mandatory leave, regular maternity leave, and shared parental leave. Mothers get 39 weeks of statutory maternity pay at 90% of their average wage.
- Paternity: Grants fathers at least 2 weeks at 90% of statutory paternity pay from the child’s birth.
- Adoption: Provides 39 weeks at 90% average earnings as statutory adoption pay. Note: Both parents can’t avail this simultaneously; one must opt for paternity leave.
Additional Perks
Beyond the obligatory perks, businesses might consider more enticing offers to keep their top talent. Some sought-after benefits in the UK include:- Personal health insurance
- Death benefits
- Flexible work arrangements
- Additional holiday provisions
- Enhanced pension contributions
Such voluntary benefits play a pivotal role, especially considering they're among the top reasons employees switch jobs. Enhanced perks, such as a superior workplace pension, can notably enhance staff loyalty and commitment.
In Summary
From the above, it's evident what benefits are legally required and the additional perks employers might consider offering.While workplace pensions often represent the most significant expense for businesses and employees, many don’t view it as a benefit. This is largely due to the complexities of auto enrolment presented by traditional pension providers.
Penfold’s workplace pension is clear, uncomplicated, and jargon free – offering a user friendly pension your staff will love, backed up with the kind of customer support you wish every company provided. Book a demo today to find out more.
