Legislation and Payment Changes April 2016

As always, April sees a number of changes in financial matters and the big change for 2016 is the introduction of the National Living Wage – rates for many other payments, however, have been frozen. Here’s a snapshot of the current situation:

National Living Wage

The headline-grabbing change for this April is the introduction of the compulsory National Living Wage (NLW). From 6 April 2016, this mandatory payment will apply to all workers aged 25 and over.

Initially set at £7.20 an hour, it will run alongside the current National Minimum Wage (NMW) rates (see table – rates are likely to change again on 1 October 2016) and is expected to rise to more than £9 by 2020.

National Minimum Wage

The Government is also targeting employers who fail to pay the correct rates for NMW. An increase in the penalty for underpayment is also on the cards, under the Small Business, Enterprise and Employment Act 2015. The fine of 100% of the underpayment owed to each worker will be doubled to 200% up to £20,000 per worker.

Statutory Rates

Generally, the rates of Statutory Pay increase in April in line with the Consumer Price Index (CPI), however as this fell by 0.1% in the year to September 2015, the rates for 2016/2017 have been frozen. Employees must earn at least £112 a week to be entitled to these payments – this amount has also been frozen for 2016/17.

Compensation Payments

Laws that will see employer face financial penalties if they fail to pay tribunal awards or Acas settlement sums are expected to come into effect in April 2016. Employers will be forced to pay 50% of the unpaid award – maximum and minimum amounts will apply – and there will be reductions for prompt payment.

For help with your human resources requirements, issues and activities, please contact us for a no obligation discussion. Embrace HR, based in Aylesbury, Buckinghamshire, helps SMEs who do not have their own HR departments, or those who need HR support from time to time.  Email us at cecily.lalloo@embracehr.co.uk or phone Cecily on 07767 308 717.