As of today, there has been a rise in the minimum wage, leading to a bigger pay packet for some workers but, according to union leaders, the low-paid will actually be worse off.
The adult rate has increased by 11p an hour to £6.19, but there was no change to the £4.98 an hour for 18 to 20-year-olds and the £3.68 an hour for workers above school leaving age but under 18. However, the rate for apprentices increased by 5p to £2.65 an hour.
Because the rise is not in line with inflation, which is running at 2.9 per cent, the 1.8 percent rise will leave almost a million workers feeling the pinch, although at least there has been a rise, which was challenged by some employers, who wanted the rate frozen as they struggle themselves to pay their staff.
There have also been a number of other changes to employment law today but the most significant is pensions auto-enrolment, which will affect millions of people and is the most radical change to pension law for years.
Under the new scheme, a percentage of a worker’s pay packet will automatically be diverted to a pension pot, assuming they are aged over 22 and not already part of a workplace pension scheme.
Initially, this will only amount to a minimum of 0.8 percent of their pensionable earnings. But their employer will, by law, be obliged to add the equivalent of 1 percent of their employee’s earnings to the pot, while tax relief adds another 0.2 percent.
However, only the largest employers will be involved in the first wave of automatic enrolment. Others will then join as the system is rolled out and the smallest firms will not sign up their staff until June 2015 at the earliest.