It’s early February and already the Conservative Government’s legislative reforms are impacting upon businesses of all sizes. There are a number of key points to cover in this blog, so we’ll plough on!
Firstly, companies which rely on exclusivity clauses in their zero hour employment contracts are already in breach of legislation. As from 11th January 2016, employers cannot restrict those engaged under such an agreement from working for another organisation, or to prohibit workers from doing so without the employer’s consent, those contracts are now unenforceable. Not only that; employees have the right to make an employment tribunal claim where their employer punishes them for breach of an exclusivity clause in such a contract. Companies who use zero hour employment contracts are urged to check them as soon as possible.
Secondly, companies will need to start thinking about the change happening on 1st April 2016. It’s not that long away, so forward planning is essential to meet these changes. From this date, the National Minimum Wage (Amendment) Regulations 2016 (SI 2016/68) introduces the New Compulsory Living Wage of £7.20 as the single hourly rate for adults aged 25 years or older, with penalties being introduced for non-compliance. Employers which fail to pay employees this wage will be charged double the penalty previously charged, i.e. 200% of the amount by which a worker has been paid below the national minimum wage. For those aged under 25, lower national minimum wage rates will apply. This will be an issue for many employers as they consider how to introduce it.
The third key change involves apprenticeships. On 1st April, 2016, employer NICs for Apprentices aged under 25, are abolished, but there is no set date for two other Enterprise Bill actions. The first aims to ban companies which utilise apprentices, from using the term “apprenticeship” where it isn’t actually a statutory apprenticeship. The second is the proposed apprenticeship target for public-sector organisations. If relevant, it’s worth planning ahead for these changes.
As a result of a fall in the consumer price index, the Government has proposed that the annual increase in the weekly rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will not happen in 2016. Statutory sick pay will also remain the same. This is unusual as the rates usually increase each year, but is understandable.
Whilst businesses need to embrace these changes, there will be more changes to follow. The next blog will focus at the new mandatory gender pay gap reporting and the implications for businesses.