April 2016 sees the introduction of a number of changes to employment law. If you are an employer, read on for a summary.
The National Living Wage
The National Living Wage (NLW) was introduced on 1 April 2016. The new pay rate should not be confused with the National Minimum Wage (NMW) which still applies, or the Living Wage, which is a voluntary rate.
If you have employees aged 25 or over, the NLW will be payable without exception. This includes agency workers, casual labourers, apprentices who have finished their first year and agricultural workers. The rate is currently set at £7.20 per hour, and will be reviewed each year in April. We will be covering the National Living Wage in more detail next month.
Sick, Maternity, Paternity, Shared Parental and Adoption Pay Frozen
These statutory rates have all been frozen for 2016/17 at the rates at applied for 2015/16. For sick pay this is £88.45 per week. The others are £139.58, or if the normal weekly wage of the person involved is less than that, it is 90% of their normal earnings.
Employer National Insurance Contributions Abolished for Apprentices Under 25
From 6 April, employers no longer have to pay Class 1 National Insurance contributions on earnings that fall below the upper earnings limit for apprentices under 25 years of age.
With the introduction courtesy of the Pensions Act 2014 of the new state pension for anyone reaching the pension age from 6 April, the pension rules for employers have changed. There will be no more contracting out for defined-benefit schemes. Employers in the private sector can therefore increase employees’ pension contributions and reduce pension accrual.
From 6 April, the rules of Procedure in the Employment Tribunals (Constitution and Rules of Procedure Regulations 2013) changed, so that there is a limit to the number of postponements that a party can be granted, unless the circumstances are exceptional. This is to avoid significant delays in decisions and related rising costs. What is more, from 6 April, increases in the limits on certain employment tribunal awards came into force. The limit on a week’s pay for calculating redundancy payments will increase from £475 to £479 and the maximum compensatory award for unfair dismissal will increase from £78.335 to £78,962 providing it is lower than the additional compensatory award cap of 52 weeks’ pay.
If you have any queries about these changes, bring them up with your local bookkeepers. They will be happy to guide you through the implications for your business, and just as earnest as you to ensure that you don’t fall foul of any of the new rules.