October 12, 2016
October 2016 Employment Law Updates
October is always a month when HR practitioners need to keep an eye out for any changes in employment law. As is to be expected, there are quite a few changes that HR needs to know about, so we have scouted around for you to find out what major changes are afoot. The CIPD’s website is a good source of information if you wish to delve into these changes in further detail.
Some of the changes are yet to be implemented or even have a date for implementation, but they are on the horizon and HR needs to be aware of them and thinking about the implications.
1. National minimum wage. New national minimum wage rates came into force on October 1. For workers aged 21-25, the rates rose to £6.95 an hour. For those aged over 18 but under 21, rates rose to £5.55 an hour. For those aged under 18 and no longer of compulsory school age, rates rose to £4.00 an hour. Apprentices’ rates have also risen to £3.40 an hour.
2. Gender pay gap reporting. Any private sector and voluntary employers with 250 or more employees will have to publish details of their gender pay gap and gender bonus gap. They will need to do this annually and it is expected that the first reports will be required by April 2018. With regards to bonus payments, the information will need to be reported earlier, covering the 12 months preceding April 2017.
3. Public sector exit payments. New rules on public sector exit payments are going to come into force, although the date of implementation is not yet known. When it happens, exit payments will be capped at £95,000. Plus, any public sector employees with an annual wage of £80,000 or above who returns to work within the public sector within a year of leaving will need to repay their exit payment. How much will need to be repaid will depend on how long has elapsed since they left their former role.
4. Taxing termination payments. There are no regulations on tax and national insurance contributions with regards to terminations payments.
5. Childcare. From September 2017, the Government plans to offer parents to three and four year olds 30 hours of free childcare, double the provision currently available. Plus, as of early 2017, the Government has said it will also pay 20% of the annual childcare costs for children aged under 12 to parents who earn under a certain amount. Capped at £2,000 per child, it will be available to families where both parents work, with each parent earning less than £100,000 a year and with a minimum weekly income at least equivalent to 16 hours at the rate of the national minimum wage.
6. Immigration. The Government wants to reduce the reliance on migrant workers and so it plans to introduce a visa levy on organisations that sponsor workers from outside the European Economic Area and Switzerland. When the Immigration Act came into force in July 2016, it announced a clampdown on employers who knowingly employ illegal workers. This includes new powers for immigration enforcement officers to shut business premises for 48 hours if it is discovered that illegal workers are employed there. The Act also requires public-facing public sector workers to be fluent English speakers.
7. Apprenticeships. All large employers (those will pay bills over £3 million) will be required to pay an apprenticeship levy. What this means is that the 0.5% levied from the employer’s paybill will then be used to fund the cost of apprenticeship training and assessment. It is widely expected that the levy will be introduced in April 2017.
8. Trade union law. There will be significant changes to trade union law. The Trade Union Bill became the Trade Union Act in May this year and there will be a phased implementation. Most of these changes will relate to rules on industrial action, changes such as the introduction of new voting thresholds. There is no date as yet for implementation, so HR needs to keep an eye out.
9. Tribunal enforcement penalties. Employers that do not pay out compensation after a tribunal or any sums agreed under an Acas settlement agreement will leave themselves open to a financial penalty.
10. Sunday shop workers gain increased protection. Under new rules, Sunday shop workers gain new rights, including being able to object to working more than their normal hours on a Sunday. Also included will be a reduction in the notice period that workers in big shops have to give in order to opt out of Sunday working.
11. Pensions auto-enrolment. Compliance is still rolling out, depending on the size of organisations.