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Don’t be the fool who breaks the living wage rule!

Apart from being April Fool’s Day, Friday 1 April 2016 is notable for employers because that sees the introduction of the National Living Wage.  This will apply to all workers who are aged 25 and over as at 1 April 2016. The Living Wage rate will be £7.20 per hour.

Employers should be aware that the following new rules will be in force a few days later on 6 April 2016.

The statutory maximum on a week’s pay will increase from £475 to £479 

This is always significant for employers as the maximum amount of a week’s pay is used to calculate statutory redundancy payments and also the amount which the Employment Tribunal can award for successful claims of unfair dismissal and constructive unfair dismissal.

Penalties for unpaid tribunal awards and settlements 

A new scheme is being introduced which will penalise employers who fail to pay tribunal awards or settlement sums which have been agreed under an ACAS COT3.  The COT3 is the settlement agreement negotiated through ACAS which has been agreed between the employer and the employee.

Changes to national insurance contribution

National Insurance contribution rebates for contracting out of occupational pension scheme on a salary related basis by providing alternative benefits outside the state pension will no longer be valid.  Employers and employees will have to contribute in full.

Tribunal postponements

In order to reduce the time and cost occasioned by requests from either employers or employees involved in tribunal claims to postpone the hearing, the Government has decided to limit the number of postponements to two and any postponements must be made seven days before a tribunal hearing.  If a successful application for a postponement is made less than seven days before a hearing, then the party inconvenienced by the postponement may be entitled to a costs or preparation order.

If you have any queries on any of the forthcoming employment law changes then please do not hesitate to contact our Julie Sullivan.

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