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.