Employment law changes 2016

Posted 30th March 2016

Written by Newtons Employment Law Team

The month of April 2016 sees the introduction of a number of key employment law changes with the most significant perhaps being the arrival of the National Living Wage.

Employment Law advice for business from Newtons Solicitors

Although the National Living Wage is something many employers have been conscious of for some time and to an extent have had the opportunity to plan for in advance, its overall impact still remains largely uncertain.

An outline of the most notable proposals and changes are summarised below: –

  • National Living Wage – From 1 April 2016 employers will be required to pay workers over the age of 25 the National Living Wage rate of £7.20 per hour. The new National Living Wage rate will commence from the first pay reference period that begins after 1 April 2016.
  • Minimum Wage Penalties – The penalty for failure to comply with the National Minimum Wage (or National Living Wage) is due to double from 100% to 200% of the underpayment, although this can be reduced if payment is made within 14 days.
  • Tribunal Compensation and Redundancy Payment – The maximum compensatory award for unfair dismissal will rise from £78,335 to £78,962 (or a year’s gross pay, whichever is lower). The maximum amount of a week’s pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, also rises from £475 to £479.
  • Financial Penalties for Unpaid Tribunal Awards and Settlements – The Small Business, Enterprise and Employment Act 2015 will introduce a new scheme penalising employers who fail to pay tribunal awards or settlement sums. The penalty will be 50% of the amount owed subject to a minimum threshold of £100 and an upper limit of £5,000.
  • Tribunal Hearing Postponements – Each party in tribunal proceedings will be limited to two hearing postponements in a case. Any application for postponement must be made no later than 7 days before the hearing or the party requesting postponement will risk facing costs consequences even if the postponement is granted by the tribunal.
  • Public Sector Termination Payments – New regulations are likely to require higher-earning public sector employees to repay termination payments (or a proportion of the payment), if they are re-employed in the public sector within a period of 12 months.
  • Immigration – An employer sponsoring a skilled non-EEA foreign worker settling in the UK under Tier 2 of the Immigration points system will be required to comply with a new minimum salary requirement of £35,000, unless they have an occupation which is referred to on the shortage of occupation list.
  • National Insurance for Apprentices – Employers who have apprentices aged 25 years and under on their payroll will be able to claim exemption from employers NIC on the cost of the salary of the apprentice up to the upper earnings limit.

If you require any advice or assistance on any of the recent proposed and forthcoming changes, please do not hesitate to contact a member of our Employment Team.