Employment law is constantly evolving, and in April this year a number of changes are due to be announced that both employers and employees should be prepared for. To help you keep on top of the new legislations, here’s a checklist of the major Employment Law changes coming into effect next month, as reported by Personnel Today:
1. The introduction of the national living wage
As of 1 April 2016, all workers aged 25 and over will have to be paid the national living wage rate of £7.20 per hour. This will be the new top national minimum wage rate, and it’s crucial that employers also check their staff’s pay does not fall below this new rate due to salary sacrifice schemes.
2. Penalties increased for non-payment of national minimum wage
It’s also worth noting that the fine for any employer found not to be paying the national minimum wage is going to double – yes, double! The enforcement process will remain the same, however.
3. Penalties for non-payment of tribunal awards
With research showing that in 2013 less than half of tribunal claimants received their full compensation from their employer, legislation could come into force in April allowing tribunal enforcement officers to impose financial penalties on employers who do not pay a tribunal award or Aca settlement amount. This will be 50% of the unpaid award, with a reduction for swift payment.
4. New state pension scheme introduced
A single-tier state pension will be introduced from 6 April this year, replacing the basic state pension and additional state pension. From this date, employer-provided pension schemes will not have the option of contracting out of the state pension and receiving a national insurance rebate; so, employers that provide a previously contracted-out scheme will see their employer and employee national insurance contribution liability increase. Employees should be warned that there may be an impact on their pay packet.
5. No more employer NICs for under 25s
As part of the government’s initiative to encourage more businesses to launch apprenticeships for young people, employers will no longer have to pay employer national insurance contributions for any apprentices under 25.
6. Public-sector employees may have to pay back exit payments
In April 2016 (or perhaps even sooner) laws requiring high earning public-sector employees to repay exit payments if they re-join the public sector within 12 months are due to come into force. This repayment will include redundancy payments, voluntary exit payments and those made to reduce an actuarial reduction to a pension upon early retirement.
7. Salary requirement introduced for tier 2 employees
Employers will soon be able to sponsor skilled workers from other countries to come and work for them in the UK, under tier 2 of the immigration points system. From 6 April 2016, there will be a new minimum salary requirement of £35,000.
8. Statutory sickness and leave pay will be frozen
OK so this one isn’t so much of a change, but is still worth noting. Unlike in earlier years, April 2016 will see statutory adoption, maternity, paternity or shared parental pay rates remain the same. Statutory sick pay will also be frozen at 2015’s rate.
If you need to keep up-to-date with the latest developments in the employment and HR industries, Lucy Bristow can help both candidates and employers.