What to look out for in 2016
I have summarised the main highlights below.
Zero Hours Contracts
Whilst exclusivity clauses in zero hours contracts were made unenforceable last year, from 11th January 2016 regulations come into force which give zero hours employees the right not to be unfairly dismissed and zero hours employees and workers the right not to suffer detriment as a result of failing to comply with exclusivity clauses.
National Living Wage
The national living wage will be introduced on 1st April 2016. For the first time, all employers will be obliged to pay staff aged 25 and over the National Living wage, which is initially set at £7.20. For staff aged under 25, the National Minimum Wage rates will continue to apply.
At the same time the penalty for failing to pay the National Minimum Wage will double from 100% of arrears to 200% of arrears, though the overall maximum of £20,000 will remain unchanged.
Although auto-enrolment has been in force for several years now, its phased introduction means that many smaller employers will only begin grappling with it in 2016 and 2017. Businesses can find out their staging date (in other words, the date by which they need to have the auto-enrolment scheme up and running) by checking on the Pensions Regulator’s website but should bear in mind that it takes a few months to select a scheme, get it set up and put the employee paperwork in place.
In most cases businesses need to start planning the process six months before their staging date. In particular, businesses need to determine which of their staff will need to be automatically enrolled and whether the business wants to use a ‘postponement period’ so staff are not automatically enrolled during their first three months of employment. Initially, the minimum employer contribution will be at 1 per cent of ‘qualifying earnings’, but this will rise over time to 3 per cent.
Employer NICs for Apprentices under the age of 25
From April 2016 employers will not have to pay Class 1 NICs in respect of “young apprentices” (apprentices under the age of 25) which was announced in the Chancellor’s 2014 Autumn Statement in a bid to make it cheaper to employ young people. The exemption will apply to Class 1 NICs on earnings up to the upper earnings limit.
The Gender Pay Gap reporting
From 26th March 2016, businesses with 250 or more employees will have to publish information about the difference in pay between men and women – including any gap in bonus payments. Whilst the detail of what needs to be reported is yet to be released, businesses would be well advised to make sure they have the relevant data available, and start work on the identification of any gaps, and measures to address them.
No increase in statutory rates
Whilst the rates for statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay usually rise each year the Government are proposing that 2016 sees no changes because of a fall in the Consumer prices Index, to which the rates are related.
The Trade Union Bill, which is to be debated in the House of Lords next week will introduce a rule that 50% of union members must support a strike for it to be considered valid. It also sets time limits for any action to take place after the ballot is taken.
2016 will also see a number of key decisions in the courts which will affect employers. These include cases on whether commission should be taken into account in holiday pay; redundancy consultation; whistleblowing; equal pay and age discrimination.