Business Insurance Tips - #9 Need to Know 2016 Employment Law Changes
When you’re running a small business it can be difficult to keep on top of all the different legislative changes. However, failure to understand and take action on key employment law amendments could land you with significant fines or Business Insurance claims under your Employment Practices Liability Insurance.
Nine Key Employment Law Changes in 2016
We’ve pulled together below some of the key changes to employment law coming into force in 2016. It’s important that both you, and any other key staff, fully understand how this legislation will impact your business and take the necessary action to implement any required changes to your business practices.
#1 The National Living Wage (April 2016)
A new minimum ‘living wage’ of £7.20 per hour will be introduced for all workers who are at least 25 years of age with effect from April 2016. Firms not adhering to the new legislation could face fines of up to £20,000 per employee.
#2 Apprentice NIC Abolished (6th April 2016)
Employer National Insurance Contributions (NIC) will be abolished for apprentices aged under 25 with effect from 6th April 2016. Employers will no longer have to pay Class 1 national insurance contributions (NICs) on earnings up to the upper earnings limit for apprentices younger than 25 years old.
#3 State Pension Regulations 2015 (6th April 2016)
A new single-tier, flat-rate pension will affect people who reach State Pension age (currently 67) from 6th April 2016 onwards, providing that individual has contributed at least 35 qualifying years of national insurance contributions.
#4 Compulsory Gender Pay Reporting (2016)
All employers, be it private companies or voluntary sector organisations, that employ at least 250 individuals will be required to publish information showing whether or not there are differences in gender pay.
The proposed penalty for non-compliance with the new measures is a fine of up to £5,000. However, the potential negative publicity and employment relations risks and Employment Practices Liability Insurance claims could be far more damaging.
#5 Childcare Payments Act 2014 (2016)
The new childcare payments benefit scheme will allow working parents to claim 20 per cent of their childcare costs (up to a maximum of £2,000 per child) annually. This could be very beneficial to small firms where childcare was previously prohibitive in terms of staff returning to work or increasing their working hours.
#6 Childcare Bill (April 2016)
The Childcare Bill will allow parents (one of whom must be employed) up to 30 hours of free childcare a week for their 3- to 4-year-old children. Similar benefits apply to SME’s as with the Childcare payment act, allowing greater flexibility across your workforce.
#7 Small Business, Enterprise and Employment Act 2015 (April 2016)
All organisations, regardless of their size will be required to keep and maintain for public inspection, a register listing of persons having significant control (PSC). Individuals that are identified as PSCs will be required to provide relevant information to the company.
The object of this legislation is to protect vulnerable individuals, highlighting risk and delivering greater transparency. Typically, individuals with over a 25% share in a business, or 25% voting rights will need to be registered.
#8 Salary requirement for Tier 2 workers (6th April 2016)
Migration is a hot topic with UK Government and with effect from 6th April 2015, any UK migrant workers who apply to settle in the UK under the Tier 2 general and sportsperson categories will be required to earn at least £35,000 per annum.
#9 Immigration Bill (April 2016)
The Immigration bill intends to introduce new penalties for illegal workers and employers that knowingly hire illegal workers.
Building on the Immigration Act of 2014, powers to prosecute businesses increase to cover those who now have “reasonable cause to believe” rather than having “knowingly” employed a migrant worker. Individuals can face sentences of up to 5 years, whilst immigration officials will also have the right to close businesses for up to 48 hours whilst they conduct their investigations.
Additionally, measures will be put into place to bar illegal migrants from accessing housing, driving licences and bank accounts.
Business Insurance Review
Insync specialises in cover for small to medium sized business across the UK. We work with our clients to help them protect themselves against all key exposures to their business. We can arrange Directors and Officers Insurance and Employment Practices Liability Insurance at affordable premiums, providing genuine peace of mind.
Request a quotation online, alternatively, why not book a free review with one of our Business Insurance Experts at a time that suits YOUR diary.
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About the Author
I’m passionate about family, sport, technology and business.
In fact, I have always been fascinated by business, whether it was running the school tuck-shop or my Saturday job in the local store, I was always looking for ways to improve or view things differently.
I have enjoyed an amazing career fast approaching 25 years in the insurance industry, which has given me real insight into the challenges and opportunities faced by SME businesses in today’s ever-evolving marketplace.
I co-founded Insync Insurance, to offer companies a new way to buy and manage their business insurance. A synergy of digital servicing and personal expertise - utilising the latest technology to enhance relationships, not to replace them.