Employment law and HR is an ever changing world. Sometimes a change in government sees a raft of changes, perceived to be either in favour of the employee or in favour of the business.
There are various employment law reforms which you will need to be mindful of in 2016, although not all the changes will affect smaller employers.
I have picked out a few for you:
Implementation is from 1st April 2016 at a rate of £7.20 per hour, working as a new top rate of national minimum wage and adding a premium of 50p per hour. Staff under the age of 25 will be paid the lower national minimum wage rate.
Harsher penalties have also been introduced if employers fail to pay their staff the national minimum rate with a penalty of up to £20,000 per underpaid employee. Naming and shaming defaulting companies has been around for a while now and is set to continue!
This applies to all businesses and it's time to start putting things in place now to avoid the penalty or a claim from your employees.
Some of our clients have raised concerns about diminishing the differential between those with more experience and those who will be on the NLW and the consequent pressure to increase salaries across the board. Unfortunately, there is no way around this so you need to get your payroll and your employees up to speed now.
As an employer, you will need to publish five different statistics on the rates of pay within your business which will highlight differences in pay between men and women.
Pay includes basic salary, paid leave, maternity pay, sick pay, shift premiums, allowances and bonus pay. It does not include overtime pay, expenses or benefits in kind. Employers will need to work out each employee's hourly rate in order to create comparable statistics.
Although you won't have to publish the statistics until 30 April 2018, you will need to start collecting relevant data from April 2017.
Employees can bring an employment tribunal claim against employers who ignore the ban on exclusivity clauses in zero hours contracts.
There has been much publicity surrounding the use of zero hours contracts. Although these contracts are perfectly valid, exclusivity clauses in zero hours contracts were prohibited in 2015.
In order to aid the effective enforcement of the ban, from 11 January 2016 employees will have the ability to complain to an employment tribunal where they have been dismissed or been the victim of detriment as a result of breach of an exclusivity clause in their contract.
All employers will receive an annual allowance of £15,000 against the levy, in effect making the levy payable only to the extent that the employer's pay bill exceeds £3m per year. It won't apply to smaller employers and whilst businesses have been less than thrilled about the levy HMRC say that fewer than 2% of employers will pay any levy at all.
Connected employers, such as a group of companies, will only receive one allowance.
The logic is that the government want to massively increase the number of apprenticeships and want companies to pay for this. The payback comes in the saved cost of training the apprentices.
This is small comfort to those companies with a large wage bill but in an industry sector where they will not be making use of apprentices as they will be paying the levy to support other sectors where there is a greater use of apprenticeships.
For more from Jay Bhayani, see: Are you entitled to a lunch break?
What do you think of this year's employment law changes? Comment below - make sure you login or sign up first!
There are various employment law reforms which you will need to be mindful of in 2016, although not all the changes will affect smaller employers.
I have picked out a few for you:
1. National living wage introduced
This is attracting a lot of attention and small businesses in particular are unhappy. Currently, the National Minimum Wage is effectively in four bands depending on the age of the worker. The new National Living Wage (NLW) is a fifth band applicable to those aged 25 and over.Implementation is from 1st April 2016 at a rate of £7.20 per hour, working as a new top rate of national minimum wage and adding a premium of 50p per hour. Staff under the age of 25 will be paid the lower national minimum wage rate.
Harsher penalties have also been introduced if employers fail to pay their staff the national minimum rate with a penalty of up to £20,000 per underpaid employee. Naming and shaming defaulting companies has been around for a while now and is set to continue!
This applies to all businesses and it's time to start putting things in place now to avoid the penalty or a claim from your employees.
Some of our clients have raised concerns about diminishing the differential between those with more experience and those who will be on the NLW and the consequent pressure to increase salaries across the board. Unfortunately, there is no way around this so you need to get your payroll and your employees up to speed now.
2. Gender pay reporting introduced
On 12 February 2016, the government issued a further consultation paper to address the issue of the gender pay gap. It proposed regulations that will require companies with 250 employees or more to publish a range of figures and statistics to monitor and assess the gender pay gap within their business.As an employer, you will need to publish five different statistics on the rates of pay within your business which will highlight differences in pay between men and women.
Pay includes basic salary, paid leave, maternity pay, sick pay, shift premiums, allowances and bonus pay. It does not include overtime pay, expenses or benefits in kind. Employers will need to work out each employee's hourly rate in order to create comparable statistics.
Although you won't have to publish the statistics until 30 April 2018, you will need to start collecting relevant data from April 2017.
3. No change to statutory sick and parental pay
The government has stated that the annual increase is not taking place this year and so statutory paternity, maternity, adoption, shared parental and sick pay will remain the same.4. Changes to trade union law
Greater requirements are going to be placed on trade unions according to the Trade Union Bill which reforms the current law applying to industrial action. The reforms affect the voting threshold increasing it to 50% from 40%, the time-limit for industrial action after ballot and increasing the amount of notice needed to be given.5. Change to laws on employing foreign workers
More stringent English language requirements are going to be introduced for foreign workers in public facing roles under the Immigration Bill. An immigration skills charge is also going to be introduced for employers that employ foreign workers.Employees can bring an employment tribunal claim against employers who ignore the ban on exclusivity clauses in zero hours contracts.
There has been much publicity surrounding the use of zero hours contracts. Although these contracts are perfectly valid, exclusivity clauses in zero hours contracts were prohibited in 2015.
In order to aid the effective enforcement of the ban, from 11 January 2016 employees will have the ability to complain to an employment tribunal where they have been dismissed or been the victim of detriment as a result of breach of an exclusivity clause in their contract.
6. Apprenticeship Levy
This comes into effect in April 2017 and will be payable by employers across all sectors in the UK at 0.5% of the national insurance pay bill.All employers will receive an annual allowance of £15,000 against the levy, in effect making the levy payable only to the extent that the employer's pay bill exceeds £3m per year. It won't apply to smaller employers and whilst businesses have been less than thrilled about the levy HMRC say that fewer than 2% of employers will pay any levy at all.
Connected employers, such as a group of companies, will only receive one allowance.
The logic is that the government want to massively increase the number of apprenticeships and want companies to pay for this. The payback comes in the saved cost of training the apprentices.
This is small comfort to those companies with a large wage bill but in an industry sector where they will not be making use of apprentices as they will be paying the levy to support other sectors where there is a greater use of apprenticeships.
For more from Jay Bhayani, see: Are you entitled to a lunch break?
What do you think of this year's employment law changes? Comment below - make sure you login or sign up first!
