Prepare to give the workers a pay rise?

According to the summer budget, there are going to be changes in employment legislation. What exactly are these changes and how will they affect my business?

Perhaps the most significant announcement was the introduction of the compulsory national living wage from April 2016, writes Peter Done, managing director of Peninsula. This will not affect all employees — only those aged 25 and over. They must be paid at least £7.20 an hour from next April which represents a 50p an hour rise on the rate that this age group would have otherwise received.

To fund a further 3m apprenticeships by 2020, large employers will have to pay an apprenticeship levy. There are no details as yet on who exactly the levy will apply to and how much it will be, but it is designed so that those who use the system will get more out of it than they put in. Employers will be able to buy training with digital apprenticeship vouchers.28

The government will also consult on termination payments, especially on how they are subjected to tax and national insurance contributions. The objective will be to make the system simpler and fairer.

The employment allowance will rise to £3,000 from April 2016. This allowance, which allows eligible businesses to forgo an element of their national insurance bill, is currently £2,000.

While working-age state benefits will be fixed for the next four years, statutory sick pay, maternity pay and so on will not be affected and will continue to increase.

About Steve Young

Steve Young is the Managing Partner of Downtown Recruitment who are based in Thame, Oxfordshire. Downtown Recruitment provide a wide variety of temporary and permanent staff to the local area covering a wide range of disciplines across the commercial and industrial sectors. View Downtown Recruitment's main website
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