In 2016, employers will begin to feel the impact of the employment law reforms made by the first Conservative Government in nearly 20 years. There are some controversial decisions affecting a number of employment measures.
The introduction of the national living wage sees a major change to minimum pay levels; this will be a big issue for many employers as they consider how to introduce it. However, in practice it will not change the basic rate of the minimum wage.
For the first time, large employers will also be required to publish details of their gender pay gap.
Aside from these two big reforms, other changes to which employers and employees alike need to pay attention include the Trade Union Bill and new rules on exit payments for public-sector workers.
1. Gender Pay Reporting
Large employers, with over 250 employees, will be obliged to publish information about their gender pay gaps.
We know that regulations must be introduced by 26 March 2016 that will make it compulsory for organisations with 250 or more employees to publish information about the difference in pay between men and women. This will need to include details of the gap in bonus payments.
Read the draft Regulations here:
It is expected that employers will be given time to get to grips with the legislation before the reporting requirements come into force.
2. National living wage introduced
A significant change for the lowest-paid workers is the introduction of the National Living Wage on 1 April 2016.
For the first time, employers will need to pay staff aged 25 and over the national living wage, which will work as a new top rate of the national minimum wage. For those aged under 25, lower national minimum wage rates will apply.
The national living wage is initially set at £7.20.
The national living wage is separate to the living wage, a recommended rate based on the cost of living, used by the Living Wage Foundation.
Another change concerning minimum pay is the doubling of the penalty for failure to pay staff the national minimum.
3. Statutory Parental Pay rates and Sick Pay frozen
All current and future statutory rates (where available) are listed here
The Government has proposed that the annual increase in the weekly rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will not happen in 2016.
The rates normally increase every year, but a fall in the consumer prices index has meant no uplift for 2016/17.
Statutory sick pay will also remain the same.
4. Restrictions placed on public-sector exit payments
Payments made to public-sector staff when they leave their job are subject to new rules.
First, to limit excessive payments, exit payments for public-sector employees are capped at £95,000. There is no confirmed implementation date for this change.
Second, from 1 April 2016, there will be a requirement for public-sector employees with annual earnings of £100,000 or more to repay exit payments where they return to work in the same part of the sector within 12 months.
5. Trade Union Law Changes
The Trade Union Bill reforms the law applying to trade unions, including placing more stringent requirements on trade unions before they take industrial action.
The measures include: increasing the voting threshold to 50%; introducing a requirement that 40% of all those entitled to vote in the ballot vote in favour of industrial action in important public services; setting a four-month time limit for industrial action after the ballot; and increasing the amount of notice to be given to an employer of strike action.
Read more about this here:
6. Workers given power to seek redress where employer ignores ban on exclusivity clauses
Exclusivity clauses in zero hours contracts were prohibited in 2015. New regulations that apply from 11 January 2016 aimed at addressing avoidance of the ban, give employees the power to make a complaint to an employment tribunal where they have been dismissed or subjected to a detriment following breach of an exclusivity clause.
7. New rules to Protect Apprenticeships
The Government bans organisations from using the term “apprenticeship” where it is applied to describe a scheme that is not a statutory apprenticeship, for example in a job advert.
There will also be an apprenticeship target for public-sector organisations.
8. Updated Immigration Law – Employing Foreign Workers
The Immigration Bill makes various changes to the law applying to foreign workers, including: creating an offence of illegal working; requiring all public-facing public-sector employees to speak English fluently; and introducing an immigration skills charge for employers that use foreign workers.
Read more here: