April 2016 employment law changes: what you need to know

New employment law legislation comes into effect in April 2016

The month of April is always important for UK employment law, when new legislations are introduced and employer responsibilities develop and change. April 2016 is no different, with the spotlight shining brightly upon the introduction of the new national living wage.

However, there are other key changes being introduced of which employers need to be aware. Therefore, this week, Protecting.co.uk will be detailing four of the new developments which are to come into effect in April 2016 (followed by four more next week).

1) As mentioned above, from 1 April 2016 the new national living wage will come into effect throughout the UK. The national living wage is a higher tier of the national minimum wage. Under the new law, workers aged 25+ must be paid at least £7.20 (a 50p increase on the national minimum wage of £6.70).

The government advises employers to carry out the following four point check-list:

  • Check you know who is eligible in your organisation.
  • Take the appropriate payroll action.
  • Let your staff know about their new pay rate.
  • Check your staff under 25 are earning the correct rate of national minimum wage
New employment law to be introduced in April 2016

Gov.uk new State Pension

2) Employers found not paying the national living wage or the national minimum wage, will be fined double more than in previous years, as the penalty increases from 1 April 2016.

3) From 6 April 2016, employers will no longer be required to pay national insurance contributions for apprentices under the age of 25. This is designed to encourage the creation of apprenticeships.

4) A new State Pension is to be introduced from 6 April 2016 with a few consequences, of which employers and employees should be made aware. The new State Pension replaces the Basic State Pension and the Additional State Pension.

‘Contracting out’ of the Additional State Pension scheme to workplace, personal or stakeholder pensions will no longer be valid and employees who have been doing this will notice they are paying more national insurance than they are used to. Employers have a duty to discuss this issue with their workers.

To find out more about Protecting.co.uk ‘s employment law services, please click here.

Small businesses issued compliance notices by Pensions Regulator

Small businesses that are not complying with the automatic enrolment scheme rules are being issued with fines

The Pensions Regulator has said it is handing out increasing numbers of compliance notices and fines, as small businesses fail to keep on top of the Government’s automatic enrolment pension scheme.

The automatic enrolment scheme was introduced by the Government in 2012 to encourage employees to contribute to their workplace pension. The automatic enrolment scheme was initially aimed at larger businesses, but, since last summer, 12,000 small employers, even those that employ only one or two people, must now follow the rules of the scheme.

Employers must automatically enrol employees into their pension scheme if they:

  • work in the UK
  • earn more than £10,000 per year
  • aged between 22 and the State Pension age

The Pensions Regulator has handed out 4,818 warnings to employers since the scheme started in 2012, but 2,596 of these were issued in the last three months of 2015. Employers are given only so long to act upon the compliance notices until they are issued with a £400 fine.

Automatic enrolment scheme for pensions

Government automatic enrolment pension campaign

Since Autumn 2012, a total of 1,594 fixed fines of £400 have been issued to businesses that have failed to automatically enrol their employees, even after receiving a warning; an alarming 1,013 of those were handed out between October and December 2015.

Pensions Minister, Baroness Altmann, commented: “So far 5.8 million people have been automatically enrolled into a workplace pension. Thanks to automatic enrolment workplace pensions are becoming the norm and we expect nine million people to be newly saving or saving more.”

To find out more about our Employment Law services, please click here.