Many of the updates this year are to confirm that current limits and regulations will remain as they are. For example, the amount paid for statutory sick pay is the same as last year. However, it is important to know about any changes and the minimum requirements, even if you already pay over and above the statutory minimum rates. Our summary below highlights the key points.
The National Living Wage was effective from 1st April 2016
Workers aged 25 and over are now entitled to the National Living Wage rate of £7.20 per hour from the first pay reference period, beginning on or after 1 April 2016 and your business must be compliant. If you have any queries please do not hesitate to contact us.
Statutory family-related pay and sick pay rates are frozen
Unlike in previous years, there will be no increase to statutory adoption, maternity, paternity or shared parental pay rates in April 2016. Statutory sick pay will also remain at the same rate that has applied since April 2015. Click here to see the rates.
Increased penalties for non-payment of the National Minimum Wage
The penalty for employers not paying the National Minimum Wage will double from 1 April 2016. The enforcement regime is the same for non-payment of the National Living Wage. You must ensure your salaries meet the minimum wage requirements. The National Minimum Wage rate per hour depends on the employee’s age and whether they are an apprentice – they must be at least school leaving age to get it.
|21 and over
(up to 25)
|18 to 20||Under 18||Apprentice*|
|2015 (current rate)||£6.70||£5.30||£3.87||£3.30|
There is a new state pension scheme, ending contracting-out
A single-tier state pension will be introduced from 6 April 2016, replacing the previous basic state pension and additional state pension.
Employer NICs are abolished for apprentices under age 25
As part of the Government’s drive to encourage employers to create more apprenticeships for young people, from 6 April 2016, employers will not pay the employer National Insurance contributions for apprentices aged under 25. If you are planning to employ an apprentice, please contact us about apprentice contracts and pay.
Public-sector employees required to repay exit payments
Regulations requiring higher-earning public-sector employees to repay exit payments, if they re-join the public sector within a year, are expected to come into force in April 2016 or soon after.
The duty to repay will include redundancy payments, voluntary exit payments and payments made to reduce an actuarial reduction to a pension on early retirement. A full copy of the regulations can be found on www.gov.uk
Financial penalties can be imposed for non-payment of tribunal awards
Legislation allowing tribunal enforcement officers to impose a financial penalty on an employer that fails to pay a tribunal award or ACAS settlement sum is expected to come into force in April 2016.
A minimum salary requirement is introduced for Tier 2 workers
Employers can sponsor skilled foreign workers to come to the UK to work for them under Tier 2 of the Immigration Points System. A new requirement for a minimum salary of £35,000 will apply from 6 April 2016.
The maximum amount of statutory redundancy pay and the limit on the amount employment tribunals can award for unfair dismissals increase from 6 April 2016, under new legislation
Employers that dismiss employees for redundancy must pay those with two years’ service, an amount based on the employee’s weekly pay, length of service and age. Weekly pay is subject to a maximum amount and from 6 April 2016 this will increase to £479, from £475. The top award of statutory redundancy pay also increases from £14,250 to £14,370.
The maximum compensatory award for unfair dismissal is also increasing from the current £78,335 to £78,962.
The Education and Adoption Bill
The Education and Adoption Bill completed its passage through Parliament on the night of 23 February. This includes new measures to allow swifter intervention where a school is coasting or failing, which will see more schools become Academies. The DfE says the measures will “speed up the transformation of our worst schools, removing bureaucracy” and that the bill sends “a clear message that this government delivers on its manifesto commitments”. In the next and final step, the Education and Adoption Bill will be taken to Her Majesty the Queen for royal assent. This will turn the bill into an act of Parliament and its measures will come into force as soon as possible.
If you need help or advice on any of the topics above please contact your HR Advisor, call 01924 827869 or email email@example.com