What does 2016 hold for employers?

Philip Sayers, gives his predictions for the key Employment issues that businesses will face in 2016.

“The biggest change for employers in 2016 will undoubtedly come in April, with the introduction of the National Living Wage, which will be an increase on the current National Minimum Wage. Employers will need to plan for the impact this will have on the economics of their organisations. There is another factor that employers would do well to take note of: Sports Direct reportedly has a number of difficulties with the way in which staff are dealt with, including compliance with the National Minimum Wage legislation. It is reported that because staff have to go through compulsory checks at the end of each shift and when those hours are added in, staff are not actually paid the minimum wage. Employers will therefore need to be wary of this problem: time taken to get ready for work, changing, handing over, tidying up and so on, all need to be included within the contractual hours. As the minimum hourly rate increases, more businesses are at risk of non-compliance–possibly unwittingly–and the penalties for getting it wrong can be substantial.

“The long-running saga of what staff should be paid while on annual leave is set to continue in 2016. A number of related court decisions came to the conclusion that holiday pay should not be limited to just basic salary but has also to include payments to reflect what the employee might have earned had they been at work, including compulsory overtime, bonuses, commission. With all of those decisions in mind, employers were able to re-organise themselves to reflect this. However one of the decisions, relating to commission payments, is now under appeal. Perhaps 2016 will finally give businesses clarity on this issue. In the meantime, employers need to keep an eye out for the outcome of that case and then see how it affects them.

“Following extended rights to request flexible working in 2014, there could be further developments in the year ahead, with the European Commission launching a consultation on work life balance. The outcome of that may well be the greater encouragement of staff to use the flexible working legislation introduced about 18 months ago.

“The increasing burden of legislation and regulation on employers, as well as a desire to work more flexibly has led to an increasing number of people choosing self-employment over employee status. This approach does need to be done carefully and a number of cases are coming up that look at this sort of arrangement. Courts, and more importantly HMRC, are not bound by what the individuals call an arrangement. Questions such as who controls how and when the work is done, whose equipment is used, whether a substitute person can be used and the level of financial risk, are all relevant considerations. With care, compliant self-employment arrangements can be made, but again these will need to reflect future court decisions.”

For any Employment enquiries in the year ahead, contact Philip Sayers on 0800 328 3282 or info@coodes.co.uk.