Member Article

Are NE businesses prepared for 2016 employment changes?

The Christmas stockings have been folded and put away, New Year’s Resolutions have been made. It’s back to business, but are SMEs in the North East aware of the big employment law changes that come into effect for them in 2016? The HR Dept discusses the key points.

The big new thing for 2016 is the introduction of the National Living Wage. The other change which will start to impact upon many of the region’s SMEs this year is the continuing roll-out of auto-enrolment – the new workplace pension scheme.

Jayne Hart from the HR Dept Newcastle expands: “The National Living Wage comes into play in April 2016 starting at a minimum of £7.20 for over 25s. It will rise progressively to £9 by 2020. For businesses who currently employ people below this rate it has the potential to have quite an impact. So we would advise preparing for it as soon as possible - if you haven’t already done so.”

There are various things to consider, including the age profile of your workforce (under 25s are exempt from Living Wage rules), the impact up the pay bands and the knock-on effects on other parts of remuneration packages. There could be complexities at every turn.

“Auto-enrolment” Jayne continues “has been introduced in stages, based upon the size of a company’s payroll scheme, and is affecting SMEs now. Each company is issued with a staging date for when their auto-enrolment obligations come into force. If you don’t know yours, you can find it on The Pensions Regulator Website. Knowing this should be a priority, as you will need to make preparations before this date including selecting a pension scheme, adjusting payroll and communicating with employees.”

Missing your staging date and failing to comply with auto-enrolment rules will have repercussions ranging from informal warnings through to fines and penalties. So do not delay!

The HR Dept is on hand to help North East businesses navigate the complex world of employment law and can offer advice, guidance and solutions to companies grappling with the National Living Wage and auto-enrolment.

This was posted in Bdaily's Members' News section by Jayne Hart .