Red Tape October faces small firms

Small firms face more red tape with a range of new regulations scheduled to come into effect in October.

Among the latest regulations to face small firms next month will be changes to rights for new parents, new fire responsibilities, age discrimination laws and an increase in the minimum wage.

Chief Executive of the Forum of Private Business, Nick Goulding, is calling for positive action to cut red tape's strangle hold on smaller businesses.

He said:"In October, we will see another wave of extra regulations hit smaller businesses, which are already struggling to keep their heads above the water.

"There will be extra responsibilities for fire safety, the need to revise practices to avoid costly age discrimination claims, the minimum wage is set to increase and changes to maternity rights could leave small firms holding the baby."

Maternity regulations

Changes in maternity regulations will come into force for parents who expect to be giving birth to or adopting a child from April 1 2007. They will mean that, from October 1 2006, small firms with fewer than five employees will no longer be exempt from the law, which says that employers must hold a position or a similar job open until the employee returns to work from their leave.

Employees will also not have to serve a qualifying period for extended leave. Mr Goulding said: "This could have serious consequences for small businesses. There is a danger that firms will be left with the costly and difficult task of replacing staff who have entered into the job, knowing they will be taking extended leave very early in their employment."

There are some positive aspects to the new maternity rights. Employees on maternity leave will now be entitled to work up to 10 days, without having to end their leave period, in order to stay in touch with their workplace, which is something that could benefit firms as well as their staff.

Employees will also have to give much more notice (increasing from 28 days to eight weeks) if they plan to return to work earlier, or later, than their original return date. That is something that the FPB welcomes.