2016: What is in store for employers?

The National Living Wage

A happy new year for the low paid and not so for business… April 2016 sees the Government’s new National Living Wage enshrined in law. Anyone working and aged 25 or over and not in the first year of an apprenticeship, legally, will be entitled to at least £7.20 per hour. The Government is committed to increasing this annually, so by 2020 it will rise to more than £9 per hour.

If you’re an employer, you’ll need to make sure you’re paying your staff correctly from 1st April 2016, as the National Living Wage will be enforced as strongly as the current National Minimum Wage.

Gender Pay Gap Reporting

In 2016 it is likely that we will see new requirements for organisations to report on differences in gender pay. Whilst no organisation intentionally sets out to pay women less than men, the Office for National Statistics reports that top-level gender pay gap is 54.9 per cent. Whilst shadow women and equalities minister Kate Green said the gender pay gap in the UK was nearly 20% more than the European average. Really quite shocking!

In a March 2014 study by the Department for Culture, Media and Sport, the gender pay gap for all staff in the UK in 2013 was 19.7 per cent, as measured by hourly earnings for all employees.

The gender pay gap varies for different age groups and in 2013, and was lowest for those in the youngest age groups. It then increases up to the 40 to 49 year old age group, before falling in the older age bands.

The gender pay gap across high and low earners also varies. In 2013 the gap was lowest for those in the 10th percentile of earnings. However for those earning the most it has not decreased by as much as the other groups. According to the Guardian (9 November 2015) among Britain’s top earners, the pay divide between men and women is nearly 55%, according to the TUC. The top 2% of male earners bring in more than £117,352 a year, while women get £75,745.

There is much to do to close the gender pay gap and this likely new reporting requirement will require organisations to keep detailed records and invest in or develop strong systems to report on this whilst avoiding an additional administrative burden.

Commission and holiday pay

An answer in the long running saga on whether commission should be included in holiday pay came a step closer recently when the Employment Appeal Tribunal (EAT) heard an appeal in the case Lock v British Gas Trading.

The judgment is expected early in 2016 so watch this space…