Published by: Heather Cowley

Employment Column for Business2Business – August 2015 edition

In July, George Osborne delivered the first Conservative budget for 20 years. In this edition we are looking at some of the changes proposed by the new government that businesses should note and track developments:

National Living Wage (NLW) – comes into effect from April 2016 and ensures everyone aged 25 and over receives a wage of at least £7.20 per hour.  The NLW will increase to £9 by 2020.  The NLW replaces the National Minimum Wage (NMW) for workers over 25.  The NMW will apply to workers under 25. 

The NMW will increase from 1 October 2015: Aged 21+ £6.50 to £6.70; Aged 18-20 £5.13 to £5.30; Aged 16-17 £3.79 to £3.87; and apprentices under 19 or in first year of apprenticeship - £2.73 to £3.30

Gender Pay Gap Reporting – legislation will be introduced requiring companies with more than 250 employees to publish the difference between the average pay of their male and female employees.  The new legislation is expected to be in force around March 2016 with the first reports required by 2017. Employers affected by the changes should liaise with their employment law advisors to identify issues affecting their business.

Strike reforms – new legislation will ensure strikes are only the result of a ballot in which at least half the workforce has voted and will abolish the ban on use of agency staff during strikes.

Salary Sacrifice - salary sacrifice schemes will be “actively monitored” as they are viewed as an increasing cost to the tax payer.  The current salary sacrifice schemes for childcare vouchers will be replaced in late 2015 with a new scheme which does not require employer participation.  Eligible working families may be able to claim 20% of qualifying childcare costs.

Apprenticeships - the government plans to start 3 million apprenticeships during this Parliament.  A new levy on large UK employers will fund the new apprenticeships.

EU membership – a referendum on EU membership will be held by the end of 2017.  Much of UK employment legislation is based upon EU law and this could have a significant impact on employment law.