Clear and Practical Legal Advice

What is changing in employment law in October 2016

What is changing in employment Law in October 2016

There is not a great deal changing this October.  The only substantive change happening this month is the increase to the national minimum wage rates.  There are however other changes coming along the tracks that employers should be aware of:

  1. National Minimum Wage

From 1 October 2016 the hourly national minimum wage rates will be as follows:

  • The National Living Wage (workers aged 25 and above) will remain at £7.20 per hour;
  • The standard adult rate (workers aged 21-24) – an increase from £6.70 to £6.95;
  • The development rate (workers aged 18-20) – an increase from £5.30 to £5.55;
  • The young worker’s rate (workers aged 16-17 who are not apprentices) – an increase from £3.70 to £4.00;
  • The apprenticeship rate – an increase from £3.30 to £3.40.

This is the last time that wage rates will increase in the autumn. From April 2017 all of the rates, including the National Living Wage, will be raised at the same time.  There is no indication what the new rate for the National Living Wage will be next April but current indications are that it will be between £7.60 – £7.65

  1. Gender Pay Gap reporting.

Companies with at least 250 employees will have to publish an annual report showing the overall gender pay gap in their organisation.  Calculations will have to be shown for both mean and median hourly pay over a specific pay period (which is likely to be the employer’s usual pay cycle).

Information will also have to be given regarding any ‘gender bonus gap’ as well over a 12-month period.

Final regulations are likely to commence in April 2017.  So we can expect the first pay reports to start filtering through in April 2018.

  1. Public Sector Payments

A new cap is likely to come into force soon limiting public sector exit payments to £95,000.  The government wants to end six figure public sector exit payments which between 2011 and 2014 was around £6.5 billion.

  1. Apprenticeship Levy

In spring 2017, the way the government funds apprenticeships in England will change.  The levy will require all employers in the UK with a pay bill of £3 million each year to make an investment in apprenticeships.

The levy will be charged at the rate of 0.5% of an employer’s annual pay bill.  Employers will receive a levy allowance of £15,000 per year to offset against the levy that they pay.  The levy will be paid to HMRC through the PAYE process.

How we can help

Employment law is always changing. Aeris Employment Law can help keep you up-to-date with the various changes and advise you on what steps you may need to make to your own procedures to take account of the changes.

For further information please contact Karin Henson at [email protected]