Employment law changes from April 2016 – A summary for employers

Law firm Lindsays advises employers to be aware of the new employment law changes which have come into effect this month. The key points are listed below and a reference guide for employers which summarises the changes can also be downloaded here.

April

• Introduction of National Living Wage

On 1st April 2016 the National Living Wage took effect in the UK. For employers, this means that all workers aged 25 and over are entitled to be paid a minimum of £7.20 per hour. The NLW is an additional rate on top of the existing National Minimum Wage which remains in place.

• National Minimum Wage Rates

These remain the same until 1st October 2016 – see below.

Penalties for employers failing to pay the above wages have doubled as of 1st April, to 200% of arrears, to a maximum of £20,000 per worker.

• Unfair Dismissal Awards

As of 6th April, for unfair dismissal claims which have been brought to an employment tribunal the maximum compensatory award has increased to from £78,335 to £78,962. The basic award has increased to £14,370 (previously £14,250).

• Redundancy Pay

The compensation limit for a one-off redundancy pay has been increased to £14,370 (formally £14,250).

• One Week’s Pay Change

The maximum figure which is used to calculate redundancy payments has increased to £479 from £475.

October

• National Minimum Wage Rates Increase

As of 1st October 2016 the apprentice rate will rise to £3.40, the minimum hourly rate for 16-17 year olds will increase to £4.00, 18-20 year olds will be entitled to a minimum of £5.55 and 21-24 year olds must be paid at least £6.95 per hour.

If you would like to discuss any of the above employment law changes or would be interested in information on prism, our fixed fee employment law solutions please contact a member of our employment team.