2016 is seeing some fundamental and controversial changes in employment law introduced by the Conservative Government, which will bring radical change to HR departments throughout the UK. Reforms include changes to pay structures and what we have to report, trade union policies, public sector workers and foreign workers. At Ison Harrison we understand you need a trusted source to cover the ever-changing and ever-complex employment law requirements. We are keen to keep you fully informed of employment law changes and here we give you a brief overview of the latest key reforms. In all cases you are advised to investigate this legislation further where it affects you.
Gender Pay Gap Reporting
Employers in companies with more than 250 employees will be obliged to publish details of the pay differential in their organisation between men and women. This includes bonus payments, shift premiums and maternity/sick pay, and this legislation is expected to be in force by October 2016. The first reporting period will be from April 2017.
National Living Wage Introduced
A change to the existing minimum wage structure is effective as of 6 April 2016, and sees the introduction of the national living wage, which dictates that employees aged 25 or over are paid a minimum wage of £7.20 per hour. This is the new top rate of the national minimum wage. Employees under the age of 25 will have a lower national minimum wage rate, but all these rates will be increased annually in April. Another significant change is that employers found to be paying employees below these rates could have their penalties
doubled compared to previously. We have previously reported upon the draconian fines that are now regularly handed out with offenders names published on the Government website.
Statutory Sick Pay and Parental Pay Rates Frozen
Parental pay rates include maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay. These rates typically increase annually, but a freeze has been put on these for the 2016/17 tax year as a result of the consumer price index falling. The rate for statutory sick pay will also remain the same.
Public Sector Exit Payments
Exit payments for public sector employees have been capped at £95,000 under new rules which won’t be implemented before 1 October 2016. Also, if a public sector employee earns more than £100,000 and returns to work in the same sector within 12 months, he/she will be required to repay their exit payments.
A number of measures have been introduced in the Trade Union Act 2016, aimed at preventing industrial action by placing more stringent requirements on trade unions.
- Introducing an increased voting threshold of 50%
- In important public services, 40% of those entitled to vote must vote in favour of industrial action
- After a ballot vote in favour of industrial action, that action must take place within four months
- The period of notice that must be given to an employer of impending industrial action has been increased from seven days to 14.
Employing Foreign Workers
A number of measures have been introduced from 12 July 2016, via the Immigration Bill, to clamp down on employers and how they use foreign workers. These measures include creating an offence of ‘knowingly’ employing illegal workers, ensuring all public-facing public sector workers are fluent English speakers and introducing an immigration skills charge for employers that use foreign workers.