5 Key changes that affect small businesses and employees from Spring 2016
National Living Wage
From 1st April 2016 any worker who is 25 years old or above will be entitled to the National Living Wage, which is initially set at £7.20 per hour. The National Minimum Wage will continue to apply to workers under the age of 25. In addition, the penalty for employers who fail to pay the minimum amounts to workers has doubled from 100% of the underpayment to 200%. This, along with the introduction of Pension Auto Enrolment (which for many is due to take effect this year), will mean further increases in the cost of running a company, which will have a big impact on small businesses. However, the Spring Budget did have some good news on this front, which is discussed in more detail below.
As part of the Government’s drive to create more apprenticeships for young people, they have abolished the requirement on employers to pay NIC for apprentices under 25. This comes into effect from 6th April 2016. In addition, although not yet in force, the Government wants to ban organisations from using the term ‘apprenticeship’ unless it is a statutory apprenticeship. In order to be a statutory apprenticeship, there are certain legal requirements that must be met.
Zero Hour Contracts
The Government recently banned exclusivity clauses in zero hour contracts. These are clauses that state the employee can only work for that specific employer and no one else. Now an employee can seek redress against unfair dismissal and detrimental treatment if a contract contains such a clause and it is breached.
Statutory maternity, paternity, adoption and shared parental leave pay will remain frozen at £139.58 per week and statutory sick pay will remain frozen at £88.45 per week.
Employment Tribunal Claims
The non-payment of an employment tribunal judgment could result in a penalty fine from the employment tribunal enforcement officers. The Government has also limited the number of hearing postponement applications a party can make to two and set a deadline for such applications, namely seven days before the hearing.
We understand that calculating earnings so as to ensure you are paying the National Living Wage can be a real headache; it is a minefield knowing what should and should not be counted towards ‘wages’. We can take the workload away from you by undertaking the calculations in line with the current legislation. Alternatively, if you are concerned you are not receiving the correct pay, we can investigate this for you and provide advice on how to ensure you get paid in line with the minimum amounts.
If you are employing apprentices and are unsure whether your current contracts meet the legal requirements for a ‘statutory apprenticeship’, we can assist by reviewing your contracts to ensure you are compliant, saving you both time and money in the long run.
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