Employment Law Updates – April 2016

As April is soon to be upon us we thought it would be helpful to do a summary of the bi-annual changes to employment law this year.

  • As of 1 April 2016, workers aged 25 and over will be entitled to receive the new national living wage rate of £7.20 per hour. This is the new top rate of the national minimum wage. Employers should be careful to ensure that any salary-sacrifice schemes do not bring their employees pay below the new rate.
  • Also from 1 April 2016 the penalty for employers in cases of non-payment of the national minimum wage will double. The enforcement regime is the same for non-payment of the national living wage.
  • As of 6 April 2016 the basic state pension and additional state pension will be replaced by a single-tier state pension. Pension schemes provided by employers will no longer be able to contract out of the state pension and receive a rebate on national insurance. In practice, where a previous contracted-out scheme was provided by an employer, national insurance contributions will increase for both employer and employee. Where this is likely to impact on employees pay, employers must ensure that employees are informed of the impact and the reasons for this.
  • From 6 April 2016 employers will not pay employer’s national insurance contributions for any apprentices under the age of 25.
  • Regulations are expected to come into force in April 2016 or soon after, requiring higher earning employees in the public-sector to repay exit payments, if they re-join the public sector. The requirement will include the repayment of redundancy payments, voluntary exit payments and any payments made to reduce an actuarial reduction to a pension on early retirement. As and when more details regarding the regulations are announced we will provide further detail.
  • It is expected that legislation allowing Tribunal enforcement officers to impose financial penalties on any employers who fail to pay settlement sums agreed through ACAS or awarded by a Tribunal, will come into force in April 2016. The penalties will be subject to minimum and maximum amounts and a reduction for prompt payment, but enforcement officers will be entitled to impose 50% of the unpaid award.
  • Under tier 2 of the immigration points system, Employers can sponsor skilled foreign workers to come to the UK to work for them. From 6 April 2016 a minimum salary of £35,000 will apply.
  • Statutory rate of pay usually increase annually however this April there will be no increase to statutory sick pay or statutory maternity, paternity, adoption or shared parental pay rates, which will all remain the same as those applied since April 2015. However there is a rise in the maximum weekly pay figure used for calculation of the statutory redundancy payment and the basic award in the Employment Tribunal of £479 per week (up from £475).

If you remain unclear on any of the above and how they might affect you as either an employer or indeed an employee then please contact me for further bespoke advice at crystalbolton@michaellewin.co.uk.

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