The only substantive change happening next month is the increase to the national minimum wage rates. However, there is a raft of other proposed changes which employers should be thinking about now.
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) will increase from £6.70 to £6.95;
- The development rate (workers aged 18-20) will increase from £5.30 to £5.55;
- The young worker’s rate (workers aged 16-17 who are not apprentices) will rise from £3.70 to £4.00;
- The apprenticeship rate will 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 uprated at the same time.
Gender pay gap reporting
Private and third sector employers with at least 250 employees will be required to publish an annual report showing the overall gender pay gap in their organisation, calculated using both mean and median hourly pay over a specific pay period (normally a week or a month, depending on the employer’s usual pay cycle). The report must include information on the gender balance in each of four salary quartiles, based on the employer’s overall pay range. This will show how the gender pay gap differs across the organisation.
Affected employers will also be required to publish their ‘gender bonus gap’, that is the difference between the average bonus payments paid to men and women over a 12-month period, and the proportion of male and female employees that received a bonus.
It is expected that the final regulations will be laid before Parliament in the autumn and will commence in April 2017. If this is the case, the first gender pay gap reports will be due in April 2018 based on a snapshot of pay data as at a set date in April 2017.
Find out more in our blog: What will gender pay gap reporting mean for you?
Public sector exit payments
There is to be a new cap of £95,000 on the total aggregate value of most exit payments made to public sector workers. The government is also proposing to require certain public sector workers to repay specified exit payments if they are re-employed in the public sector within 12 months. We don’t yet have a date but these changes are expected to be brought into force ‘shortly’.
The apprenticeship levy is expected to come into force in April 2017 and will apply to employers across all sectors in the UK. The levy will be payable at 0.5% of an employer’s pay bill. However, employers will receive an annual allowance of £15,000 per year to offset against the levy, which means only those with a pay bill over £3 million will pay it.
The UK government will use the funding generated:
- Via a digital voucher system in England to administer funding for apprenticeships;
- To allocate a share to each of the devolved administrations.
The government has not confirmed when the following changes will come into effect:
- Public authorities will have to ensure that anyone working for them in a customer-facing role (including agency workers) speaks fluent English. Find out more at Public sector workers: new requirement for fluent English.
- Immigration officers will be able to close premises for up to 48 hours where illegal working is suspected and the employer cannot provide evidence that right to work checks have been conducted. This is intended to deal with repeat offenders.
- There will be an “immigration skills charge” on employers sponsoring non-EEA nationals who come to the UK under Tier 2 of the points-based system (likely to be introduced in April 2017).
We have blogged before on the Trade Union Act 2016. A key element of the reform is that industrial action will be lawful only when there has been a ballot turnout of at least 50%. There are also going to be new notice requirements and time limits.
The Act has been passed and it is anticipated that the changes will come into force soon.
The government wants to strengthen the rights of shop workers. The proposals include a reduced notice period for shop workers in large shops to opt-out of Sunday working (one month rather than three) and a right to object to working more than their normal hours on a Sunday. We don’t have a timescale for this yet.
Please get in touch if you’d like more detail, or to discuss how any of the changes might impact on your business in practice.
On September 21, 2016