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Government reforms (1): Spring changes – are you ready?

living wageThe following changes are on their way in April:

1 April 2016

National Living Wage: a new mandatory National Living Wage of £7.20 per hour will be introduced from 1 April 2016 for workers aged 25 or over. The National Minimum Wage will continue to apply to other workers (current rate (until September 2016) is £6.70 per hour for 21 – 25 year olds, £5.30 per hour for 18-20 year olds:£3.87 an hour for 16-17 year olds and £3.30 per hour for apprentices).

No increase to statutory rates: There will be no increase this year in statutory rates (see our December 2015 Newsflash No increase to statutory rates). This is because the CPI fell by 0.1% in the year to September 2015.  The current weekly rates of such statutory payments will remain at their current 2015/16 levels which are as follows:

6 April 2016

Financial penalties for employers:  From 6 April 2016 a financial penalty of 50% of the outstanding amount, subject to a minimum of £100 and a maximum of £5,000 will be levied on employers who fail to pay sums ordered by a Tribunal or owed under settlement agreements reached following ACAS conciliation (see our update in our January 2016 Newsletter Government reforms: Financial penalties for unpaid awards).

Tribunal award limit increase: On 6 April 2016 the limits to Tribunal compensation will increase where the dismissal (or detriment, or whatever it is that is being complained about) takes place on or after 6 April 2016:

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