As the end of 2015 approaches, the celebrations are starting. Employees everywhere are getting into the festive spirit. But as a small business owner, you know only too well this is not a time to relax and take your eye off the business. You thoughts will already be turning to setting 2016 goals, budgets and planning what staff will be needed to achieve those ambitious targets.
As you have probably discovered, when it comes to planning and budgeting for your staffing needs, this is not always an easy task. The world of employment law can be a bit of a minefield and always seems to have something new to throw at you.
The good news is, there are many great HR consultants out there that can help you navigate your way through this difficult area, but right now, let’s take a look at the key things you should be aware of that will be coming your way in 2016.
1. Compulsory national “Living Wage”
- From 6 April 2016, the new compulsory national living wage will be introduced. You should think of this as an additional premium level added to the current national minimum wage (£6.70 per hour). The National Living wage requires that all workers who are 25 and over are paid a minimum hourly rate of £7.20per hour.You should be making sure that you will be compliant with this new rate of pay and if not, be making plans as to how you will be able to afford and implement it. You should also consider the impact that this may have on the perception of fairness of other employees within your business who may not be getting a ‘pay hike’ and how you will handle this.
2. Employer NIC Contributions
- From 6 April 2016, employers National Insurance Contributions for apprentices under the age of 25 will be abolished (on all earnings up to the upper earnings limit – currently £805 per week). This is an initiative by the current government to make it cheaper to employ young people.If you have recruitment plans for 2016, you may want to consider whether apprenticeships would be a good, cost effective option for your business. And don’t forget, employing apprentices shouldn’t just be about cost, it is an opportunity to bring new, fresh ideas and skills into your business and a way to demonstrate your commitment to give something back to the community by ups killing future generations.
3. Pensions “automatic” enrolment
By February 2017 every employer will be required to enrol eligible employees into a workplace pension scheme and deduct pension contributions from their salary. Here are the basic facts:
- Eligible employees are anyone between 22 and retirement age and earning over £10,000 per year
- The current minimum rate of contribution is 1% by you as an employer and 0.8% by the employee. The government will then top this up by 0.2% making total contributions 2%
- Employees can choose to opt out of the scheme, but it is illegal for an employer to encourage or force employees to opt out (There is a whistleblowing programme to allow employees to report employers who are considered to be taking such action.)
This link takes you to a nice, simple video explaining the details in 90 seconds – Please note we are not affiliated with or recommending this provider in any way, we just like the simplicity of information presented! If you need more information, contact your payroll provider or accountant who will be able to tell you exactly what you need to do and give you an idea of the cost implications.
If you can afford it, we suggest that you embrace the pension requirement sooner than you are legally required to do. It will work in your favour by demonstrating to your employees what a great, responsible employer you are.
So quite a bit to think about, and that is without all the existing legislation that you should ensure you are being compliant with, but remember, there is lots of help out there and good HR support does not have to be expensive. You will find that the good ones are happy to answer your initial quick questions for free.