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National Living Wage – increase next year

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You’ll know by now that each year the government announce increases to the National Minimum Wage and the National Living Wage. Predictions are in for what the new National Living Wage rate will be in 2019 and it’s a significant increase so worth planning for…..

What is the National Living Wage?

This is the rate that employers legally have to pay to their employees over the age of 25. It was first introduced in 2016 at £7.20 and resulted in significant costs to many employers.

Many people are still confused by the other term ‘Real Living Wage’. Just to clarify, this is the figure calculated by the Living Wage Foundation based on the real cost of living in the UK. It causes confusion but the main difference is that there is no legal requirement to pay the ‘Real Living Wage’.

What will the National Living Rate be next year?

The rate is currently £7.83. Phillip Hammond announced in the recent budget that the National Living Rate would be rising to £8.21 next year. This represents a 4.9% rise to the current rate and therefore one that employers need to start planning for.

(For information the real living wage has been announced as a 2.9% increase to £9.00 per hour except for London where it increases by 3.4% to £10.55).

Don’t get caught out

The next rise will take effect in April next year. Remember, employers who are incorrectly paying their staff below the minimum rates can be named and shamed and also fined up to 200% of the underpayment. Most employers caught by this in the past were as a result of simple errors and not deliberate attempts to underpay their staff.

Start planning

You know it’s coming and we recommend that you analyse your workforce now to assess the cost and plan for the increases.

Employment Tribunal Award Limits Increases

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From 6th April 2018, the limits applying to various tribunal awards and other amounts payable under employment legislation increase, including the maximum amount of a week’s pay for the purpose of calculating the basic award for unfair dismissal and a redundancy payment, increases to £508, and the maximum amount of the compensatory award for unfair dismissal, which increases to £83,682.

Family Friendly and SSP Pay Rates Increases

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Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) will rise from £140.98 to £145.18 a week from April.

Usually the rate increase would be from 1 April, but the statement to Parliament announcing the new figures suggests the date this year may be Monday 9 April 2018.

Statutory sick pay (SSP) is due to rise this month from £89.35 to £92.05.

The lower earnings limit will rise from £113 to £116.

National Minimum Wage / National Living Wage increases

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The following rates are effective 1st April 2018:
• The rate for workers aged over 25 years (NLW) will increase from £7.50 to £7.83 per hour
• The rate for workers aged 21 to 24 years will increase from £7.05 to £7.38 per hour
• The development rate for 18 to 20 years olds will increase from £5.60 to £5.90 per hour.
• The rate for 16 to 17 year olds will increase from £4.05 to £4.20 per hour.
• The apprentice rate will increase from £3.50 to £3.70 per hour

Know your employees’ rights – it could help avoid costly mistakes

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Being aware of your employees’ rights that are provided by law is a must for any employer. ConciseHR can help review your documents and processes to keep you compliant, but take a look over the rights listed out below.

 

Work rights for everyone

 

From the first day of work, all people at work, including agency workers, have the following rights:

 

  • The National Minimum wage
  • Health & Safety Protection
  • Working Time Rights (includes paid holidays, breaks and a limit on the working week).
  • The Right to Join a Union
  • Protection from Unlawful Discrimination

 

Rights for legal status “employees”

 

Rights on applying for a job

  • Not to be discriminated against in a job selection process on the grounds of  trade union membership, sex (including pregnancy/ maternity status), race (including nationality), disability, age, sexual orientation, religion/ belief (including lack thereof), or being transgender.

Rights from first day at work

  • A right not to have deductions made from pay (with some exceptions such as for tax) unless as an employer you have the contractual power to make the deductions and the employee has agreed to them in advance.
  • A right to Statutory Sick Pay provided National Insurance contributions are being paid by the employee.
  • A right not to be discriminated against on the grounds of  trade union membership, sex (including pregnancy/ maternity status), race (including nationality), disability, age, sexual orientation, religion/ belief (including lack thereof), or being transgender.
  • A right to equal pay with members of the opposite sex doing the same job, a similar job, or a job of equal value to you.
  • An entitlement to 52 weeks’ maternity leave, even if your employee was pregnant when she started the job.
  • Time off for medical appointments if your employee is pregnant.
  • Time off as unpaid leave to deal with unexpected emergencies involving family members or people who rely on your employee for their care.
  • The  right for a trade union to be recognised by the employer to negotiate working conditions if at least 10% of the people in the department/ workplace are members of that union and the union can show that the majority of employees in that department/ workplace are likely to support it being formally recognised.
  • The right to take a trade union representative or fellow worker into a disciplinary, grievance hearing, flexible working request meeting, and time off to train request meeting.
  • Can claim wrongful dismissal if you dismiss without giving the agreed notice, or resign and claim constructive unfair dismissal if it breaks a fundamental term of your employee’s contract.
  • Although more service is needed before your employee is able to claim general unfair dismissal, they can already complain about dismissal on certain grounds (e.g. dismissal for whistle-blowing, or on the basis of a protected characteristic such as race).
  • A right not to be unfairly dismissed for political views.
  • A mother’s partner has the right to attend up to 2 ante-natal appointments with the expectant mother.

Rights after a month

  • To be given one week’s notice of dismissal (or more, if the contract entitles your employee to a longer notice).
  • To be paid if suspended on medical grounds.
  • To be paid wages where laid off (where you ask your employee to work for at least a day less per week than usual).

Rights after eight weeks

  • Entitlement to a written statement of  terms of employment which must include  pay, hours, where your employee is expected to work, holidays and other benefits such as a pension entitlement.

Rights after 26 weeks

  • A right to request flexible working
  • To take shared parental leave (for babies born/adopted on or after 5th April 2015)

Rights after two years’ service

  • To claim unfair dismissal to an employment tribunal (after first advising ACAS for conciliation to be considered).
  • To claim statutory redundancy pay where dismissed due to redundancy.
  • A right, on request, to written reasons for dismissal. If your employee was dismissed because of pregnancy, maternity or childbirth, this right is from day one of employment.

Latest HR legislation changes and updates

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It’s our aim to keep you up-to-date with forthcoming changes in employment law, and tell you ‘in a nutshell’ what this means for you. So here is what’s happening currently or in the near future.

On its way in 2015…

Shared Parental Leave (SPL) – April

This new scheme takes effect for parents (or adopters) whose babies are due on or after 5th April 2015, and enables mothers to share 50 weeks of their 52 weeks maternity leave (and 37 or their 39 weeks statutory maternity pay) with their partner. It seeks to move away from the current inflexible arrangements for maternity and paternity leave and create a more equal system allowing both parents to assist with childcare and keep a strong link with their workplace. The mother and her partner can take their leave together if they wish, or in succession.
This means that from 5th April, you could receive a request from your employee to take SPL so we recommend that you start reviewing and updating any existing maternity, paternity and adoption policies, and prepare a policy and procedure for SPL.

Fit for Work Service – rolling out through 2015

This is a free government service that aims to help you manage sickness absence in your workplace, and provide you with access to an occupational health service that is free of charge.  You will be able to make a free referral for an occupational health assessment for employees who have reached 4 weeks of sickness absence, thereby receiving advice and recommendations get your employee back to work.
There will be a phased roll out of the referral service with further details likely to be announced soon, so we will keep you up to date.  At this point we recommend you review any existing sickness absence policies to reflect this new service.

Pensions Auto-enrolment – impacting SMEs from 2015

You’ll have already seen information on this from us, but just as a reminder this is starting to impact smaller organisations from now and takes at least 12 months planning time.  Every organisation employing people (even just one) will have a Staging Date, which is when you need to have implemented your auto-enrolment by.  It’s easy to find out when your Staging Date is so we urge you to do this and work back from there.  Just enter your PAYE reference into the Pensions Regulator tool.

Holiday Pay

It’s worth mentioning this topic as you’ll have probably heard lots in the media.  Late last year in a UK Employment Appeal Tribunal case (Bear Scotland versus Fulton), the courts ruled that holiday pay should include both guaranteed and non-guaranteed overtime.  The government has since taken action to reduce the potential cost of huge backdated claims on employers by limiting backdated claims to 2 years.  These changes apply to claims made on or after 1st July 2015.

Summary of changes from 2014

Just as a reminder, here’s the key changes from last year.  Just contact us if you require further information or support updating your current policies and procedures.
 

  • Increased penalties for employers who do not pay the minimum wage (current standard adult hourly rate is £6.50).
  • Early conciliation of dispute claims by ACAS prior to employment tribunal claims.This has reduced tribunals by 80%.
  • Increased penalty up to £20,000 for illegally employing an immigrant – are your employment checks in place?
  • The right to request flexible working extended to all employees with 26 weeks’ service.
  • A mother’s partner has the right to take unpaid leave to attend two antenatal appointments.
  • A new employment allowance to reduce employers NI contributions bill.

Shared Parental Leave (SPL) – Employers are you ready?

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Expected to take effect for parents of children born or placed for adoption on or after 5th April 2015.

The new proposed system will enable mothers to share 50 weeks of their 52 weeks maternity leave and 37 weeks of their 39 weeks statutory maternity pay with their partner when they opt into it.

Some key points from the proposals are:

  • The mother and her partner can take their leave together if they wish, or take it in succession.
  • Each parent will have the right to have up to 20 ‘Keeping in touch’ (KIT) days during SPL (this is in addition to the ten days allowed during maternity and adoption leave).
  • Employees who have taken SPL will have the right to return to the same job if the total leave taken is 26 weeks or less in aggregate, even if the leave is taken in discontinuous blocks.

Employers do you know your Pensions Auto-enrolment staging date?

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Pensions auto-enrolment is being rolled out gradually over a number of years.  All employers have been given their own staging date (this means when auto-enrolment is launched in their organisation) – the date is linked to the organisation’s size.  The largest organisations started in October 2012.  If you employ between 50 and 249 people your staging date will be any time from 1st April 2014 up to 1st April 2015. If you employ fewer than 50 employees, your staging date will be between 1st June 2015 and 1st April 2017.  Do you know your date?  How do you find out what it is?  What steps do you need to take and when?  We can help you, contact ConciseHR today – info@concisehr.co.uk

Flexible Working – are you prepared for the changes on 30th June 2014?

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The right to request flexible working will be extended to cover all employees after 26 weeks’ service, rather than just parents with children under 17 years, or 18 in the case of a disabled child, and certain carers.  Staff will be restricted to making one application a year, and employers still have the right to refuse requests on business grounds.   Employers need to be looking at their internal policies and procedure to ensure they comply with the new provisions.  This significant extension could also pose risk for employers who may face discrimination claims if one flexible working request is seen to have not been treated as fairly as another.