TT242: Zero hour contracts

May 19, 2016
Company Law Changes

Employment Law Update

Employing staff is a complicated area which affects most businesses. Such businesses need to keep abreast of relevant law changes. This topical tip will outline some of the recent and forthcoming changes in employment law.

Zero hour contracts – 11 January 2016

From 11 January 2016 employers will no longer be able to include exclusivity clauses in zero hour contracts.

Penalties for failure to pay National Minimum Wage (“NMW”) – 1 April 2016

The penalty for failing to pay the NMW has increased to 200% of the underpayment from 1 April 2016. Previously the penalty was 100%.

Gender Pay Gap Reporting – 1 October 2016

Businesses that have more than 25 employees will be required to publish gender pay gap statistics which will relate to differences in gross pay and bonuses.

The information will be available to the public and will be phased in.

National Minimum Wage (“NMW”) increases – 1 October 2016

The NMW will increase from 1 October 2016.

For further details please refer to our news item published on 5 April 2016 (link below).

Loss of NIC employment allowance if you employ illegal workers – 2018

The employment allowance was introduced a few years ago by the Coalition Government and was increased to £3,000 from 6 April 2016. The allowance reduces the employer’s (secondary) Class 1 National Insurance liability each time the payroll is run until the £3,000 allowance has been utilised or the tax year ends (whichever is sooner).

Employers will not be eligible for the employment allowance for a period of one year if they are subject to a civil penalty for employing illegal workers.

This measure is expected to start in 2018.

Shared Grandparent Leave – 2018

The Government reiterated again their intention to introduce shared grandparent leave and pay by 2018.

Holiday pay

Many of you may remember our Topical Tip 204 and Topical Tip 210 (links below) covering the topic of calculating holiday pay.

The Employment Appeal Tribunal in the case of Lock v British Gas 2016 EAT stated that holiday pay calculations should include result-based commission.

The decision relates to the calculation of 4 week’s holiday and not to the full statutory minimum of 5.6 weeks for full time employees. It is understood that British Gas has sought permission to appeal to the Court of Appeal and therefore this may not be the end of the matter.

This is a complicated area of law and you should refer to your HR advisor or seek specialist legal advice.

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