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Eight Employment Law Changes Employers Need To Know About In 2016

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By Teni Shahiean of OTS Solicitors

As we move into the second quarter of 2016, most employers will soon start to feel the effects of the employment law changes coming into force throughout the year. Alongside Immigration, employment law has been a big focus for change under this Conservative Government.

When delivering the 2016 budget a few weeks ago, Chancellor George Osborne was optimistic regarding the future of the UK economy, stating that it was growing faster than other economies and the country is on track for a budget surplus. This news, alongside other business friendly budget announcements, such as the cut in corporation tax, is likely to bolster business confidence and encourage further growth.

To ensure you are up to date with changes which may affect your business this year, here is a round-up of the developments to watch out for over the coming months.

1. Gender pay reporting

From the 26th March 2016 companies with more than 250 employees will be required publish information about the difference in pay between men and women within the organisation. This includes basic salaries and bonus payments.

2. National Living Wage

All employees aged over 25 years must be paid a minimum of £7.20 per hour from the 1st April 2016. The minimum wage applies to employees under 25 years; however, the penalty for employers who fail to pay the correct amount is doubling. Currently the financial penalty is calculated at 50% of the total underpayment for all employees who have been underpaid, up to a maximum of £5,000. The penalty will increase to 100% of the unpaid wages up to a maximum of £20,000.

3. Statutory Parental Pay Rates and Statutory Sick Pay rates to be frozen

All current statutory rates such as maternity, paternity, adoption and statutory sick pay which usually increase every October, will instead remain at the same level as 2015.

4. Restrictions imposed on final payments made to public sector staff

New rules are in place for payments made to public sector staff who leave their position. The cap in place is set at £95,000. The date for this rule to come into force is as yet unconfirmed; however, from 1st April 2016 any public-sector employee who earns £1,000,000 or more per annum will need to repay any exit payment if they return to work in the same part of the public sector within a year.

5. Amendment to Trade Union law

Trade Unions will be required to take more stringent actions before industrial action can be lawfully embarked on. These include:

  • a 50% turnout is required for industrial action ballots
  • any industrial action must be taken four months after ballot
  • employers must be given 14 days’ notice of industrial action (currently it is seven days)

6. employees can seek redress if their employer ignores the ban on exclusivity clauses

Exclusivity clauses were prohibited from zero hour contracts in 2015. Since January 2016, employees who have faced disciplinary action or who have been dismissed after breaching an exclusivity clause have been able to complain to the Employment Tribunal and seek redress.

7. Protection for apprenticeships

Companies can no longer refer to a placement or scheme as a ‘apprenticeship’ if it is not a statutory apprenticeship. This includes advertising a role for an apprentice when the post is not part of a formal statutory apprenticeship scheme.

8. Employing foreign workers

The Immigration Bill makes multiple changes to the law in respect of foreign workers. These include:

  • the requirement that all public-facing public-sector employees must speak English fluently;
  • the introduction of an Immigration skills charge for employers that use foreign workers;
  • To apply for Indefinite Leave to Remain, employees must earn a minimum of £35,000 per annum, unless their job is on the National Shortage Occupation List, a PHD position, or they are a nurse.

Employment law is always changing and employers need to ensure they are compliant with relevant case law and legislation to avoid time-consuming legal action. Based in London, our expert team of Solicitors are committed to delivering the best results for our Employment and Immigration clients. If you wish to receive legal advice on any of the points raised in this article, please phone our office on 0203 959 9123 to make an appointment.

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