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New statutory limits and employment law changes 2016

Here is a selection of this year’s key employment law changes to the new statutory limits, regulations, rights and responsibilities for 2016:

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1. National Living Wage

A new national living wage of £7.20 per hour is to be introduced for workers aged 25 years and above from 1 April 2016. This represent a new top rate of the national minimum wage and The Low Pay Commission will recommend future changes in the same way that advises on changes to the national minimum wage rates. The current minimum wage will still apply for workers age 24 and under.

So if you are an employer, then you need to ensure that your employees pay does not fall below this rate after agreed salary-sacrifice deductions.

Penalties will be imposed on employees that fail to pay – at a rate of 200% of the amount by which the worker has been paid below the national minimum wage. The penalty will be halved if employers pay within 14 days and the overall maximum penalty is capped at £20,000 per worker.

2. Gender pay reporting

Employers with 250 employees or more will have to publish detailed information on their gender pay gaps. This will include details of the gap in bonus payments.

3. Compensation limits for unfair dismissal 

From 6 April 2016, the cap for an unfair dismissal compensatory award will increase from £78,335 to £78,962. The cap on weekly pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) will increase from £475 to £479.

4. Tribunal Hearings

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As a result of last year’s Government consultation on tribunal hearings, new rules on the ability to postpone hearings will apply from 6 April 2016:

  •  If a tribunal hearing has already been postponed on 2 occasions at the request of the same party, then any further applications for a postponement (by that party) will only be granted in exceptional circumstances;
  • Applications for a postponement must be made at least 7 days before the hearing, other than in exceptional circumstances;
  • Should a postponement application be made less than 7 days before the hearing, a tribunal must consider a costs or preparation time order against the party that is granted the late postponement

5. Sick pay and statutory family-related pay

There will be no increase to statutory maternity, paternity, adoption, shared parental pay or statutory sick pay in April 2016.

6. State Pension Scheme

A new single-tier state pension scheme is being introduced from 6 April 2006. This will replace basic and additional state pensions; employers will no longer be able to deliver pension schemes where they elect to contract out of the state pension and claim a national insurance rebate.

If you are an employer, you need to see if this applies to your business and advise your employees on how this will affect their pay.

7. Penalties for non-payment of tribunal awards

A failure to pay an employment tribunal award or ACAS settlement sum will lead to penalties in April 2016.

The amount of the penalty will be 50% of the unpaid award (subject to caps) and a reduction for prompt payment.

8. Exit payments for public sector employees

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Higher earning public-sector employees (predominantly NHS and government staff but not those working for universities or charities) may be required to repay their exit payments if they subsequently re-join the public sector within 12 months of leaving. This duty extends to redundancy payments as well as voluntary exit payments, special severance payments, pay in lieu of notice and payments made to balance pensions on early retirement.

The “high earner” threshold has been set at £80,000 and tapering provisions will apply. It is expected that public-sector exit payments will be capped at £95,000 in October 2016.

9. Apprentices 

From the 6th April 2016, you will no longer pay employer national insurance contributions for apprentices on earnings below £827 a week (£43,000 a year). They must be under 25 years old and pursuing an approved UK government statutory apprenticeship framework.

 

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