It’s No April Fool’s Update.

By Andrew Knorpel on 07 April 2016

The 1st of April may mean a time for fun, harmless pranks and practical jokes to friends and family, but to us employment lawyers it’s the start of a week when the Government introduces (often) significant changes to employment law and we have to remember a raft of new rates and review new legislation and proposals. On this occasion, the changes are definitely no April Fool’s prank by the powers that be.

So what’s in store this April?

  • The National Living Wage – was introduced from 1 April 2016.  Employees aged 25 and over are now entitled to be paid a new minimum hourly rate of £7.20. The National Minimum Wage will continue to apply to employees aged under 25 years.  Click here for the Governments new guidance on calculating the minimum wage of which each band will increase in October 2016. The penalty for non-payment of the NMW/NLW also increases to 200% of the total underpayment (up from 100%) but, as before, the penalty will be halved if paid within 14 days.
  • Rates – there have been some changes in the statutory payment rates and compensation limits – these have been updated on our website.
    Awards/Settlements – A new scheme will came into force on 6 April 2016, which imposes penalties on employers who do not pay Employment Tribunal awards or settlement payments agreed via ACAS conciliation and set out in a COT3 agreement.  The penalties can be of up to 50% of the unpaid sum.
  • Data Protection – the ICO has published their first guidance on preparing for the changes in data protection following the General Data Protection Regulation that is due to be published this July. There are new rules which will require some changes in approach by data controllers, including employers. The ICO Preparatory Guidance provides a helpful 12 step action list for data controllers. We will cover this in greater detail, closer the time, but if you can’t wait, here’s the link.
  • Budget lowlight for employers – at present payments received in connection with the termination of employment may be paid free of tax and national insurance contributions (NICs) up to £30,000. The balance over £30,000 is subject to tax but is not NIC’able because compensation payments are not ‘earnings’ for NIC purposes. However, with effect from April 2018, the rules will be amended so that employer NICs will be due on the balance of termination payments above £30,000. No employee NICs will be due.
  • The Modern Slavery Act 2015 –You would be forgiven for thinking it only applies to larger commercial organisations with a turnover of £36 million or above. However, it will actually also affect smaller organisations who fall into the supply chain of the larger affected organisations. Those affected organisations with a financial year-end from 31 March 2016 must publish their statement within 6 months of that year end. If you supply goods or services to such an organisation, they are likely to be contacting you shortly to seek further information regarding your practices.

Insights.

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