The National Minimum Wage Act 1998 lays down minimum levels of hourly pay for certain employees. The current rate for those aged 21 and over is £6.70 per hour. From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce the national living wage, set at £7.20 per hour, for workers aged 25 and over.
The National Minimum Wage Regulations 2015 make sure that the hourly rate, at which a worker is entitled to be paid in respect of his or her work in any pay reference period, is the rate that is in force on the first day of that period. The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period. Therefore, where a pay reference period begins before 1 April 2016, the old rate of the national minimum wage will apply for that pay reference period.
From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce a compulsory national living wage of £7.20 per hour for all workers aged 25 and over. The Regulations also double the financial penalties for which employers will be liable if they are found to have paid any workers below the national minimum wage. The penalty is increased from 100% to 200% of the total underpayment for all workers specified in the HMRC notice of underpayment.
If you need to know more about these changes, how they affect your business and your employees, or how to handle the changes, come to our next Employment Law Update workshop. It is being held on 12 April 2016 in Wargrave, Berkshire and costs just £20 +VAT. Click here for details and online booking.
Just when you thought you knew everything you needed to know about employing staff, they changed the law! Here is a summary of some of the recent changes that you need to know about.
Tribunal penalties for employers – from 6 April penalties can be imposed on employers who lose tribunals. This could be 50% of the award between £100 and £5000 where the employer breaches the employee’s rights and where there are aggravating factors; or where the employer has not made a genuine mistake but has made a deliberate breach of the ACAS code. If you run a small business there is some leniency, but larger employers are expected to follow the new rules.
ACAS Early Conciliation – from 6 May, early conciliation is compulsory before a claim can be submitted. The claimant must contact ACAS, who will issue an early conciliation certificate when the process is complete. As an employer, this now gives you opportunity to get early warning of a case or to settle.
Statutory pay rates – from 6 April, maternity, paternity and adoption is raised to £138.18. Sick pay rises to £87.55 and gross pay for redundancy is £464.
Abolition of the percentage threshold – before 6 April employers could claim back sick pay if it exceeded 13% of the employees Class 1 National Insurance in the month. That threshold has now been abolished.
Abolition of SSP record keeping obligations – from 6 April there will be no requirement to keep specified records of dates of sickness and SSP payments. Before this there was a requirement to keep records for three years.
There are more changes proposed for later in the year, which I’ll tell about in future blogs. If you need to know how any of the changes specifically affect your business and your employees, do get in touch and I’ll talk you through what you need to know.
Employment Allowance – from 6 April 2014 a £2000 reduction in the NIC bill for all businesses and charities has been introduced. HMRC has a calculator and information you can use here.
Employment tribunal fees – from 6 April 2014 some re-categorisation of claims has been done. As a reminder, Type A claims are £160 for the issue fee plus £230 for the hearing fee; Type B claims are £250 for the issue fee and £950 for the hearing fee. Type B claims include unfair dismissal. The Tribunal can order the employer to pay if the claim is successful.
These are just a few of the recent changes and we’ll cover more in future blogs. More changes will continue to be made throughout the year to Employment Law. To keep up to date, subscribe to our newsletter here, keep reading these blogs, or come to our next workshop, which will be held in the autumn.