The Employment Law Changes of 2016

This April will see several new changes to UK employment legislation which employers and employees alike must adapt to. Every year workers are caught off guard by the sudden alterations the new tax year brings, so here is the Nationwide Employment Lawyers guide to the key changes we should all be aware of:

Introducing the National Living Wage

Perhaps the change that has garnered the most attention over the past year is the introduction of the new National Living Wage, through which workers aged 25 and over will have to be paid a minimum of £7.20; a policy beginning 1^st April 2016.

Employers must ensure all employees are paid in accordance with this arrangement, including all temporary employees, part-time workers and those working zero-hours contracts.

The New State Pension Scheme

On 6 April 2016, the UK will have a state pension that will replace all previous forms of pensions available from the government.

These alterations will include changes to all existing employer-provided pension schemes, which will no longer give employers the right to contract-out state pensions with the promise of later receiving a nationally insured rebate. So for instance, in a situation where an employer previously 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 should be made fully aware of the various effects the new pension scheme could have on their pay, along with details of the many other complex issues it raises.

New Penalties for Employers Not Paying National Minimum Wage.

The penalty against employers who fail to pay the national minimum wage to all employees working under them will double from 1^st April, with penalties potentially totalling £20,000 per worker.

However, the total cost of the penalty will be halved should the payment be made within fourteen days of being issued.

No national insurance contributions for apprentices below 25

The government has long been pushing employers towards establishing a greater number of apprenticeships for workers aged under 25. In order to encourage this plan further, it will no longer be necessary for employers to pay national insurance contributions to apprentices who fall under the 25 age bracket. This policy will begin from April 6^th 2016.

New salary requirements for Tier 2 Workers

Foreign workers employed under tier 2 of the immigration points system must be paid a minimum salary of £35,000 by their employers beginning 6^th April. This is to create a fair wage in accordance with their skills. 

Penalties for Refusing To Pay Tribunal Awards

In reaction to a 2013 study that revealed less than half of claimants awarded a payout at an employment tribunal actually received the whole sum granted, the government has decided that an additional penalty will be given to those employers who fail to pay the complete amount.

This fine will be the equivalent of half the outstanding amount set by the tribunal, with the potential for a cost reduction being possible for employers who make a prompt payment.

Exit Payments For Employees Rejoining The Public-Sector

There are plans to introduce a fee that will find higher earning public-sector employees required to make a ‘re-exit’ payment should they leave the public-sector and then return to public service work within a year of departure.

The fee involved will cover the repayment of several benefits working in the public-sector offers, such as redundancy payments and pensions; all of which are calculable to individual circumstances. This controversial scheme is expected to become part of UK employment law soon, potentially before the end of April 2016.