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Changes to UK employment Law 2016

Published 19 September 2016

It has been a year of change in employment law and more is yet to come. There remains uncertainty about what impact the decision to leave the EU will have on employment legislation post-Brexit.

Employers have already had to contend with the introduction of the living wage and new provisions of the Immigration Act, with more changes on the way (1,2) three of which will include:

Increase in the national minimum wage

From the 1 October, 2016, there will be a rise in the wage for certain age groups.

The new rate for workers aged 21 to 24 is £6.95 per hour; for those aged 18 to 20 it will be £5.55; for employees who have left education and are aged 16 - 17 the rate is raised to £4.00 per hour; and the new apprenticeship rate will be £3.40 per hour (3).

Workers aged 25 and over and not in the first year of an apprenticeship are legally entitled to the national living wage of at least £7.20 per hour, which is unaffected by the change (4).

Apprenticeship levy

The levy will be introduced on 6 April, 2017.

This is aimed at large employers with a pay bill that is over £3m. The levy will be charged at a rate of 0.5 per cent of an employer’s annual pay bill. Organisations will have a levy allowance of £15,000 per year to offset against the levy to be paid.

The government has produced guidance for all employers, whether or not they will have to pay the levy (5).

Gender pay gap reporting

This was expected to come into force next month but the introduction is now expected to be in April 2017.

Private and voluntary sector organisations with 250 or more employees will have to report on the gender pay gap.

The difference in pay between men and women has been an ongoing concern and received widespread coverage (6).

References:

  1. Immigration Act 2016 [Internet]. [cited 2016 Sep 19]. Available from: http://www.legislation.gov.uk/ukpga/2016/19/contents/enacted
  2. The Immigration Act 2016 In Plain English [Internet]. RightsInfo. 2016 [cited 2016 Sep 19]. Available from: http://rightsinfo.org/immigration-act-2016-plain-english/
  3. The Government accepts minimum wage rate recommendations - Press releases - GOV.UK [Internet]. [cited 2016 Sep 19]. Available from: https://www.gov.uk/government/news/the-government-accepts-minimum-wage-rate-recommendations--2
  4. The National Living Wage [Internet]. [cited 2016 Sep 19]. Available from: https://www.livingwage.gov.uk/
  5. Apprenticeship levy: how it will work - GOV.UK [Internet]. [cited 2016 Sep 19]. Available from: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
  6. Four ways the gender pay gap isn’t all it seems - BBC News [Internet]. [cited 2016 Sep 19]. Available from: http://www.bbc.co.uk/news/magazine-37198653

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