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Employment law update

11 May 2016

Employment law update - read more

A round-up of all of the recent changes in employment law

As you may be aware, new employment legislation is enacted twice yearly; below is a round-up of all of the recent changes you need to be aware of.

National Living Wage comes into force

From the first pay reference period following 1 April 2016, all workers aged 25 and over are entitled to the National Living Wage (NLW) of £7.20 an hour. The first pay reference period is the first full contractual pay reference period after this date.

Employers do not need to pay additional money to employees for any ‘gap’ in NLW between 1 April 2016 and the start date of the first pay reference after this date. For example, if an employers’ pay reference period starts on 20 April 2016, no additional monies need to be paid for the period between 1 April and 20 April.

New limits on employment tribunal awards and statutory redundancy pay

From 6 April 2016, the statutory cap for a maximum amount of a week’s pay increased from £475 to £479 and the maximum amount of a compensatory award for unfair dismissal increases from £78,335 to £78,962. The maximum statutory redundancy payment also increases from £14,250 to £14,370.

Employer national insurance contributions abolished for young apprentices

As announced in November 2014, to encourage employers to engage more young apprentices under the age of 25, from 6 April 2016 national insurance contributions for young apprentices are no longer legally required.

Employers’ duties under gender bonus gap

Employers with 250 or more employees in the private and voluntary sectors must publish an annual report with details of the gender bonus pay gap, in addition to the pay gap, with the first report to be published by 30 April 2018.

The gender pay gap must include the mean difference in bonus payments between men and women, including information from 30 April 2016.

For the purposes of the report, bonus payments can be cash or equivalent value shares, including incentive pay, plans or schemes, commission, profit-sharing, productivity, performance or any other payment dependent on individuals’ performance or the performance of the company.

No increase for statutory rates of pay

Usually statutory rates of pay increase in April, however, this year statutory rates of pay for maternity, paternity, adoption pay and shared parental pay remain the same. Statutory sick pay rate also remains the same at £88.45 per week.

Lydia Newman is an Employment Solicitor

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