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The Employment Law Changes of 2016

April 2016 will see a number of new changes occurring across UK employment law that employers and employees alike must adapt to. Each year workers get caught off guard by the alterations that are suddenly a UK legal requirement. Read on for an overview of the key changes we should all be prepared for.

Introducing the National Living Wage
Perhaps the change that has received the most attention over the past year is the introduction of a new National Living Wage by which workers aged 25 and over are entitled to a minimum hourly wage of £7.20.

Employers have to ensure all employees are paid in accordance with this arrangement, including temporary workers, part-time workers and those on zero-hours contracts. This policy begins from 1st April 2016.

The New State Pension Scheme
On 6 April 2016, the UK will have a new state pension that will replace all previous kinds of governmental pension available.

This change alterations will include alterations to all existing employer-provided pension schemes, which will no longer grant employers the right to contract-out state pensions with the promise of receiving a nationally insured rebate later. So in a scenario where an employer once offered a contracted-out scheme, there will now be greater liability placed on the national insurance contribution made by both employer and employee.

All employees must be made fully aware of the numerous effects such a new pension scheme can have on their wages, along with details of the many other complex issues it raises.

New Penalties for Employers Not Paying National Minimum Wage.
The penalty against employers failing to pay the new national minimum wage to their employees will increase by 100% starting 1st April, with the penalty for doing so potentially being as high as £20,000 per worker.

However, employers can halve the final cost of the penalty if they arrange the necessary payment within fourteen days of the issue date.

No national insurance contributions for apprentices below 25
For years the government has been pushing employers to establish more apprenticeships for workers aged under 25, so in order to speed up this process it has been announced that it will no longer be necessary for employers to pay national insurance contributions to apprentices under the 25 age bracket; a policy that will begin April 6th 2016.

New salary requirements for Tier 2 Workers
Employers who hire foreign workers under tier 2 of the immigration points system will have to pay these workers a minimum salary of £35,000 from 6th April in accordance with what is considered a fair wage for their skills and contribution to the UK workplace.

Penalties for Refusing To Pay Tribunal Awards
In reaction a 2013 study revealed that below half of UK claimants awarded a payout at an employment tribunal were actually receiving less than the granted sum. To assist the likelihood that the amount will be paid the government has decided an additional penalty will be given to employers failing to pay the complete amount. This fine will reflect half the amount that was set an the tribunal but can potentially be reduced if payment is prompt.

Exit Payments For Employees Rejoining The Public-Sector
There are also plans to create a fee that higher earning public-sector employees will have to pay if they leave their position within the public-sector and then return to public service within a year of their departure.

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The Brexit & UK Employment Law

If the UK leaves the European Union (EU) after the June 23rd referendum many workers will be left wondering how the change will affect laws associated with the UK workplace.
EU law supports a large part of British employment legislation, such as discrimination rights, working hours and the maternity rights granted to both women and men.

If Britain does leave the EU the government will be legally entitled to establish new laws independently of Europe, along with possessing the right to remove and strengthen the existing ones. This would be possible as Britain will no longer have to abide by the rules of the European Court of Justice.

What Changes Could The Brexit Create?
Despite the right to make changes becoming an instantly possibility for the UK government, it is however not likely that major alterations will immediately be instituted as a sudden shift from existing laws would contradict legal entitlements that UK workers are used to.

Such immediate change could interrupt benefits the average Briton has become accustomed to and thus lead to worker discord and public protest. Losses that could be made include the strong holiday pay legislation that was founded under EU law. It is far more likely that legal alterations would be made gradually and slightly due to negotiations in UK Parliament.

It’s also important to note that certain laws will almost certainly remain as they are due to them already being part of British legislation prior to Britain joining the EU. In other areas of law, Britain has actually gone beyond what has been required by EU legislation, such as introducing paternal leave rights so fathers have the opportunity to share maternity benefits with their partner. British legal progression of this nature is very unlikely to be altered as a result of the nation leaving the EU.

So Business As Usual Then?
Although it will certainly take a period of evaluation before the UK can map out a complete legal strategy for the future, it’s entirely possible that any eventual outcome might still rely on continuing European legislation unless the country elects to end its membership of the European Economic Area (EEA). If Britain does not leave the EEA certain aspects of EU employment law that will inevitably be kept. However, should this agreement be ended Britain will only need to behave in line with laws dictated by the World Trade Organisation instead of the EU.

In order to satisfy both UK workers and EU member states it is likely Britain will enter into a new series of laws that appease all trading partners in a way that will not give the UK an unfair trading advantages and thus not alienate EU nations or global trading partners.

What About Freedom of Employee Travel?
A founding aspect of EU employment law is for workers across the continent to possess the right to travel between EU states. One right involved with this law is that permanent residence in another EU country can be achieved as long as a worker has been employed for five or more years in that nation.

EU travel rights will be brought into question in the result of a Brexit and will subsequently limit international employment for UK citizens while restricting UK businesses from hiring foreign workers. Such legislation already has outspoken political voices speaking both for and against this action.

Of all the alterations that politicians on both sides of the Brexit debate argue for, employment legislation has generally not been a point of focus so far, although this could easily change in the near future.

Do you feel strongly about making changes to UK employment law?