HR and Employment Law Update

There are a number of changes to employment law in the pipeline for 2016.

Keeping up with those changes is vital but can be difficult when you are busy. Thankfully our friends at Milners’ have given this useful round-up of the proposed changes in UK Employment Law that may affect your business.

If you or your business is affected by these issues, contact Jodie Hill – Milners’ for advice or more information. If you are signed up to the Milners’ HR and Employment Law package you are already protected.


What is happening in 2016?


National Living Wage

For the first time employers will be obligated to pay staff aged 25 years and over the national living wage, which will work as a new top rate of the national minimum wage. The national living wage for 25 and overs is £7.20, which will come into effect from the 1st April.


For those under 25 the lower national minimum wage will apply.

The minimum wage currently is as follows: (This usually increases every October)


• The national minimum wage for 21 and over £6.70

• The national minimum wage for 18 and over £5.30

• The national minimum wage for 18 and under £3.87

• The national minimum wage for apprenticeships £3.30


The government will be introducing new measures to ensure the national minimum wage is protected for those low paid workers. As well as naming those whom fail to meet the requirements the new measures will include:


• Doubling the penalties for non-payment of the National Minimum Wage and the New Living wage.

• Setting up a new team in HMRC to take forward criminal prosecution for those who deliberately fail to comply.

• Ensuring that anyone found guilty will be considered for disqualification from being a company director for up to 15 years.

• A team of compliance officers in HMRC will investigate the most serious cases when it is introduced in April 2016.

This is therefore a significant and important change that will affect most businesses, make sure you are compliant to avoid unnecessary costs and potential criminal implications.


Gender Pay Gap Reporting

Under Section 78 of the Equality Act 2010 the government retains the power to make regulations requiring gender pay gap reporting mandatory. Up until now the powers have not been effected and the reports were on a voluntary basis. Due to only 5 companies reporting their figures the government have decided make the report mandatory to companies with over 250 employees in 2016 when it is enacted.

What do you need to do if you have more than 250 employees?


• Options under the new regulations include disclosure of the single over all gender pay gap or you may wish to give a detailed break down across the organisation for example by job/grade or full/part time roles.

• Examples of where this can be reported is to be determined in the course of the consultation.

• It is suggested once it has been enacted that companies will be given some time to prepare their reports.

• There are various implications this may have on the company including damage to reputation as well as a proposed penalty of up to £5,000.


Increase to Income Tax Personal Allowance – April 2016

From April the Income tax personal allowance will increase from £10,600 to £11,000.

The basic rate allowance will increase to £32,000.

The threshold for the higher wage tax allowance will rise from £42,385 to £43,000


Employer National Insurance Contributions Abolished for Apprentices under 25 – April 2016

From April 2016 employers will not have to pay Class 1 National Insurance Contributions on earnings up to the upper limit for apprentices aged under 25. This is to make it cheaper for organisations to employ the younger generation. The National Insurance Contributions for apprentices of this age will be abolished under the National Insurance Contributions Act 2011.


Updates on Employing Foreign Workers

Various changes apply to employing foreign workers due to the Immigration Bill. These changes include:


• Making an offence of illegal working.

• All public-sector public-facing employees must be able to speak English fluently.

• Introducing immigration skills charge for employers that employ foreign workers.

• There will be the creation of a new labour market enforcement agency to investigate the exploitation of migrant workers.

If you employ foreign workers we suggest you take advice before acting on this update to ensure you avoid race discrimination in the workplace.


Zero Hour Contracts

Dismissals of zero hours contractor workers/employees will be automatically unfair if the main reason was due to the fact they were working for someone else.

This means there is no qualifying period needed, offering protection to casual workers from onerous exclusivity clauses.

It is also unlawful for any company to cause a detriment to zero hour workers if they breach any kind of exclusivity claims. Effectively, this means if you have any staff on zero hours contracts you cannot prevent them from working elsewhere anymore.


Fit for Work

Fit for Work is a new (ish) government service specifically aimed at helping employees on long term sick leave return to work in SMEs.

Fit for Work is aimed at eliminating the costs for SMEs by giving employers the opportunity to refer any employees on, or likely to be on, long term sickness absence to an Occupational Health Professional who will work with the employee to reintroduce them into the workplace.


The process is straightforward:

1. The Employer discusses the Fit for Work service with the employee who is either on, or likely to be on, long term sickness absence, and with their consent refers the employee to an Occupational Health Professional for free using this link.

2. An Occupational Health professional will contact the referred employee by phone to organise an assessment. This is usually completed over the phone, although a face-to-face assessment may be necessary.

3. A Return to Work Plan will be drawn up and applied. This plan will outline the ways in which employees who have been absent from work before they have fully recovered can return to work, typically involving modified duties or working hours.


How Does Fit For Work Benefit You?

Aside from the reduced costs on SMEs presented by the Fit for Work service, the service offers several clear additional benefits:


• Employers can refer employees directly to a health professional without the need to go via the employee’s GP.

• Fit for Work delivers a smoother transition for the employee returning to work, contributing to a reduction in the costs associated with lost working hours and reduced productivity.

• The rule preventing employees from “self-referring” is still in place. The employer (with the employees consent) still instigates the referral process.

• The process allows the employee to feel involved and in control of their return to work, avoiding an acrimonious return and negative work environment and low morale.

• Fit for Work is completely free for an SME organisation to enter into.

For more information regarding Fit for Work, and to begin using the service, you can visit: Fit for Work



This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to our website for terms and conditions.

Contact Jodie Hill for Legal advice on any of these issue or for copies of relevant polices.

Jodie Hill

Solicitor – Milners Solicitors

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