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Employment Law Changes

Employment Law Changes

Employment Law Changes

Date: April 04, 2016

National Living Wage

This means that employers from the 1st April 2016 will need to pay staff aged 25 and over the NLW, which will work as a new top rate of the national minimum wage. The national living wage is initially set at £7.20. 

Statutory Rates (SMP/SPP/SAP/ShPP/SSP)

The weekly rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay would normally increase every year. This time due to a fall in the consumer prices index, the Government has announced there will be no annual increase for 2016/17. It will therefore remain at £139.58. Statutory Sick Pay, which will remain at £88.45. 

Miscellaneous Changes

 

Current Rate

New Rate

Apply to Dismissals Effective From

The limit on the amount of a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal

£475.00

£479.00

06/04/16

The maximum compensatory award for unfair dismissal subject to the overarching limit of one year’s pay

£78,335

£78,962

06/04/16

The minimum basic award in cases where the dismissal was unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons

£5,807

£5,853

06/04/16

Unpaid Awards and Settlements – Penalty Notices

The Government had said it intends to bring in the new financial penalties on respondent employers who fail to pay an Employment Tribunal award from April 2016. If, after receiving a ‘reminder warning letter’ the monies remain unpaid, then the employer will be subject to a penalty notice of 50% of the outstanding amount.  This money will be payable to the Secretary of State and not the employee. 

Employer NICs are abolished for apprentices under age 25

To encourage employers to create more apprenticeships for young people, from 6th April 2016, employers will not pay employer national insurance contributions for apprentices aged under 25.

A new state pension scheme is introduced, ending contracting-out

From 6th April 2016 a state pension replaces the previous basic state pension and additional state pension. Employer-provided pension schemes will no longer be able to contract out of the state pension and receive a national insurance rebate.  Consequently, where a contracted-out scheme was provided, its employer and employee national insurance contribution liability will increase.  Given this will have an impact upon an employee’s take home pay, the employer should explain why the employee has a larger deduction from his/her pay for national insurance, if the pension provider has not already done so. 

Michael Menzies Baird