31st March 2016


 Issue No.  2016/08




In our Information Update 2016/03 on 20th January, we provided a summary of forthcoming changes.  In this Information Update we remind you of those changes, and some others, that take effect next month (April). 

National Living Wage
1st April 2016 sees the introduction of the National Living Wage (NLW).  This means that employers from the first pay reference period beginning on or after 1st April 2016 will need to pay staff aged 25 and over the NLW, which will work as a new top rate of the national minimum wage. The national living wage is initially set at £7.20.  See Information Update 2016/07. 

Statutory Rates (SMP/SPP/SAP/ShPP/SSP)
The weekly rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay would normally increase every year. This time due to a fall in the consumer prices index, the Government has announced there will be no annual increase for 2016/17. It will therefore remain at £139.58. 

Similarly, there will be no change to Statutory Sick Pay, which will remain at £88.45. 

Guarantee Pay
There is no change to the rate of guarantee pay, which will remain at £26.00 per day for the first 5 days an employee is laid-off within a 3 month period. 

Other Changes


Current Rate

New Rate

Apply to Dismissals Effective From

The limit on the amount of a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal




The maximum compensatory award for unfair dismissal subject to the overarching limit of one year’s pay




The minimum basic award in cases where the dismissal was unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons




Unpaid Awards and Settlements – Penalty Notices
The Government had said it intends to bring in the new financial penalties on respondent employers who fail to pay an Employment Tribunal award from April 2016. 

If, after receiving a ‘reminder warning letter’ the monies remain unpaid, then the employer will be subject to a penalty notice of 50% of the outstanding amount (minimum £100, maximum £5,000). This money will be payable to the Secretary of State and not the employee. 

Employer NICs are abolished for apprentices under age 25
To encourage employers to create more apprenticeships for young people, from 6th April 2016, employers will not pay employer national insurance contributions for apprentices aged under 25. 

A salary requirement is introduced for tier 2 workers
From 6th April 2016, employers that sponsor a skilled foreign worker to work in the UK under tier 2 of the immigration points system, will have to meet a new requirement that the role has a minimum salary of £35,000. 

A new state pension scheme is introduced, ending contracting-out
From 6th April 2016 a single-tier state pension replaces the previous basic state pension and additional state pension. 

Employer-provided pension schemes will no longer be able to contract out of the state pension and receive a national insurance rebate.  Consequently, where a contracted-out scheme was provided, its employer and employee national insurance contribution liability will increase.  Given this will have an impact upon an employee’s take home pay, the employer should explain why the employee has a larger deduction from his/her pay for national insurance, if the pension provider has not already done so. 

Modern Slavery
Companies with a turnover in excess of £36million are required to publish a statement on their website which sets out the steps it is taking to prevent slavery and human trafficking in its organisation and supply chain.  The statement is to be published as soon as possible after the end of the financial year where the year ends on or after 31st March 2016.  See Information Update 2015/18 for more information.





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