Small firms calling for clarity on exemptions
- 1 April 2011
- From the section Business
A trade body has called for clarity over the extent of exemptions from new regulations for very small businesses.
Micro-businesses, of fewer than 10 employees, and some start-ups will be exempt from new domestic regulation, it was announced in the Budget.
But the Federation of Small Businesses (FSB) said there was "some confusion" over the plans.
The government confirmed the exemption would not include new paternity rights.
New rules on paternity leave had already been put in place before the moratorium came in, so small businesses must offer the new rights to their employees.
There are 4.6 million micro-businesses in the UK, and the government believes they are unfairly burdened with red tape.
So Chancellor George Osborne said that firms with fewer than 10 staff members would be free from new domestic regulation for three years from 1 April.
But the FSB said firms were still unaware of exactly how this would affect them.
"At the moment, there is some confusion as to what regulations are included in the moratorium," a spokeswoman said.
"There needs to be clarification as soon as possible so micro-firms know where they stand."
A spokesman for the Department for Work and Pensions said an explanation on the details of which legislation was covered was imminent.
The new paternity leave rules mean that parents will be legally entitled to share the childcare during their baby's first year, and could take six months off work each.
If a man's partner is due to give birth on or after 3 April, he will gain the right to additional paternity leave and pay. The rules also cover adoption.
Additional paternity leave (APL) will allow an employee to take up to 26 weeks' leave to care for the child, on top of two weeks of ordinary paternity leave.
This can only be taken 20 or more weeks after the child's birth or placement for adoption, and once the mother has returned to work from statutory maternity or adoption leave or ended her entitlement.
The rate is £128.73 a week, or 90% of average weekly earnings.
To qualify, the father must have been on a continuous contract with his employer for at least 26 weeks by the end of the 15th week before the baby is due.