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National Minimum Wage and National Living Wage

National Minimum Wage rates increase from 1 October and this equates to a 3.4% increase, as follows:-

  • The rate for apprentices is now £3.40 an hour.
  • For workers aged 16-17 it is now £4 an hour.
  • For workers aged 18-21 it is now £5.55.
  • And for workers aged 21-24 it is now £6.95.

The National Minimum Wage is not to be confused with the National Living Wage, which applies only to workers aged 25 and over, and is currently £7.20 an hour. This is expected to increase significantly in April 2017, given the government’s objective of £9 an hour by 2020.

For companies working in the leisure and hospitality sector, you may want to keep an eye on the government’s proposals on tips and gratuities. As you may know they have been consulting on how they can make sure that a fair share of tips and gratuities are received by the workers, and also how to ensure that there’s transparency in how tips and gratuities are treated. There are no firm proposals for dealing with this at the moment but we can expect developments before the end of the year.

Looking beyond 1 October

There are a range of changes that the government have said will come into force in autumn 2016 but firm dates have not yet been set so here is a quick summary of what is on the horizon

Tribunal decisions going online

Tribunals are going to make employment tribunal judgements available online. Although these judgements have always been public documents you had to go to, in person, to Bury St Edmunds or Glasgow tribunal court to view them!

With these results now going online, there is some nervousness about how this will actually work and the effect it may have. For instance, employers who lost a particularly damaging employment tribunal decision will not want this decision to be available online so this may increase pressure to settle cases where a tribunal decision may go against the employer. Similarly, employees are going to be worried about future employers doing searches against their name on this database and refusing to employ them on the basis that they’ve previously brought an employment tribunal claim.

Salary sacrifice arrangements

HMRC are planning to restrict salary sacrifice schemes where the salary is replaced by a benefit in kind i.e. replacing part of an employees’ salary in return for receiving a company mobile. HMRC are now viewing this as a form of tax avoidance so we can probably expect some change to this during 2017. The change won’t affect the most common forms of salary sacrifice where salary is sacrificed into a pension scheme or bicycle scheme or for childcare vouchers.

Grandparents and shared parental leave

The government has pledged to introduce grandparent’s leave and also to look at simplifying the rules around shared parental leave, which are currently one of the most complicated areas of employment law. If there are any changes, then these are not expected until 2018.

Post termination restriction or restrictive covenants

These are relatively common for salespeople or those working in R & D with the aim to prevent people going to work in a competing businesses or selling to their old customers for a period of time after their employment ends. The government is suggesting that these restrictions stop innovation and they recently finished a call for evidence on the use or abuse of such clauses. So we will have to see whether they will come forward with any proposals for reform.

If you have any questions or queries about the above and how it impacts your company then give us a call.

In2HR
1 Jones House
High Street
Bray
Berkshire
SL6 2AH
Tel +44 (0) 1628 622722

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We can help you hire and retain the best employees, manage your employees more successfully, and improve employee motivation. Whatever your HR outsourcing needs, In2HR can assist any company within the Thames Valley areas, including Berkshire, Buckinghamshire, Oxon and Surrey. So why not contact us today.

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