Guest blog post: what does 2016 hold for employment law?

Photo of Georgina Read

If you employ people, it’s vital to have a good understanding of UK employment law and to stay up to date with any changes that are made to the rules. So what can we expect to see in the remainder of 2016? Georgina Read, co-founder and director of citrusHR, an HR support service for small businesses in the UK, takes a look.

What's happened so far?

January 11th brought in new rules for employers using zero-hours contracts. Last year an exclusivity ban was introduced to prevent employers from stipulating that zero-contract hours workers must work for them exclusively. The change this January means that employees can now claim unfair dismissal from the first day of their employment, should their employer attempt to rely on an exclusivity clause.

What's coming next?


Short for ‘automatic enrolment for workplace pensions’, auto-enrolment requires all employers to automatically enrol eligible employees into a workplace pension. Throughout 2016 and 2017 auto-enrolment will be on the cards for all employers with fewer than 30 staff members. It can take up to six months to set up for auto-enrolment, so now is the time to start thinking about it and to seek out the following information:

  • your staging date
  • which of your staff are eligible
  • where you are going to source your workplace pension scheme
  • what you will need to contribute to the workplace pension

If you’re not sure what any of this means (or if you’d just like to refresh your memory), it's probably a good idea to head over to The Pension Regulator's website now and find out more. FreeAgent’s guide to auto-enrolment also contains a good deal of helpful information.

The National Living Wage

In April this year, the National Minimum Wage for employees aged 25 and over will increase to a new National Living Wage rate. This will be set at £7.20 per hour, but will increase to £9 per hour by 2020. If you fail to pay your staff the right amount, you'll be treated in just the same way as an employer who misses the Minimum Wage update each October: with a large fine and your company name on a public list of offenders.

If you haven't yet planned for the new Living Wage, now's the time to do it. We would suggest the following basic steps:

  1. Assess staff payroll - who is affected, and can you afford it?
  2. Improve staff performance - this may help to offset any increased cost.
  3. Ensure you hire the right people - is your recruitment strategy 'fit for purpose'?
  4. Make sure you have the right mix of skills and working arrangements - could some staff work part time for example?

Announcement of a possible apprenticeship levy in 2017

While not yet official, the government has published its response to an Apprenticeship Levy Consultation opened back in September. It looks as if an apprenticeship levy will be announced to be put in place at some point in 2017. The aim is to bring about £3bn in extra funding for 3 million new apprenticeships. The good news for smaller employers is that the levy will only affect large businesses; it will be set at a rate of 0.5% of an employer’s payroll should it exceed £3 million.

What else might change?

Of course, these might not be the only changes we could see in the remainder of 2016. At citrusHR we'll be keeping an eye on:

  • potential rulings on Working Time Regulations
  • further detail on overtime and commission elements in holiday pay
  • an extension of shared parental leave to grandparents
  • more powers for the government to prosecute those who flout employment law
  • taxation on employment termination payments
  • blind recruitment (the practice of anonymising CVs, usually by removing the candidates’ names)

We’ll also be paying close to attention to what the EU referendum might bring.

It pays to keep an eye on employment law; breaking it can cost businesses thousands of pounds. If you don’t have dedicated HR support for your business, our advice would be to keep a close eye on the news throughout the year as the potential changes we’ve outlined here could all have an impact on small businesses.

Want more bookkeeping and tax tips?

Sign up for our helpful guides to claiming expenses, filing your tax return and more.