2016 has already brought many changes to employment law including new laws to protect apprentices, shared parental leave and more flexible rules to allow individuals access to pension funds. More changes are due throughout the year. Below is a brief summary of some key developments.


National Minimum Wage (NMW)

April 2016 brought about a new NMW for workers aged 25 and over. Workers in this category should now receive a minimum wage of £7.20 per hour (National Living Wage). This will be subject to the same rules which apply to the NMW, including a yearly review.

Yearly changes will be made in April, starting in 2017.

Currently, failure to pay the NMW results in a fine equal to 100% of the underpayment owed to each worker with a £20,000 maximum fine. Changes mean that this fine will double to 200% of the underpayment owed if the debt is not paid within 14 days. Additionally, the maximum fine will increase to £20,000 per underpaid employee.


Equal Pay

From October 2016, employers with 250 or more employees will have to publish – for example on a company website – information about pay differences between the different genders, including any bonuses. Failure to publish this may result in a £5,000 fine.


Tax-free childcare scheme

For working parents, the new childcare payments benefit scheme will enable them to claim 20% of the cost of childcare up to a maximum of £2,000 per child each year, or £4,000 if the child is disabled. This is likely to help staff return to work, as well as increase their working hours, potentially benefitting smaller businesses. This entitlement is only available in families where both parents are earning less than £150,000 per year.

The Childcare Bill allows parents to claim up to 30 hours of free childcare per week for children between the ages of 3 and 4. This is provided that at least one of the parents is employed.


Immigration Bill

Currently, it is a criminal offence for an employer to ‘knowingly’ employ an illegal migrant. This will be extended to employers who have ‘reasonable cause to believe’ an employee is an illegal worker. This can lead to a prison sentence of up to 5 years, whilst a business can be closed by immigration officials for up to 48 hours whilst investigations take place.


If you have any queries as to your obligations as an employer, or your rights as an employee, please contact our specialist in Employment Law, Jane Elgar, on 01277 636426.