Changes to employment law affect us all

A dizzying number of employment law changes were introduced in April 2016 – all of which have varied implications for employers and employees across the country.

Most notably, a new compulsory National Living Wage (NLW) was introduced as a new top rate of the National Minimum Wage. Workers aged 25 and over are now entitled to an NLW rate of £7.20 per hour, affecting employees, agency workers, casual labourers, agricultural workers and even some apprentices.

Lara Murray, Employment Law Solicitor at Palmers, said: “Employers need to be fully aware of the implications of failing to pay statutory wage levels.

“It is an offence to pay workers less than the National Minimum Wage or to falsify payment records. If HMRC find that an employer hasn’t paid at least the National Minimum Wage, they can send a notice of arrears plus a penalty for not paying the correct rate of pay.

“The introduction of the National Living Wage will see some particularly tough penalties for employers who fail to comply – 200 per cent of the amount owed, unless the arrears are paid within 14 days, and a maximum fine for non-payment of £20,000 per worker.

“Employers who fail to pay will be banned from being a company director for up to 15 years.”

Furthermore, the UK’s Small Business, Enterprise & Employment Act 2015 was revised in April to introduce new rules on identifying and recording who owns and controls UK companies and LLPs.

Business are now required to collect and keep information about people with significant control over them (PSCs), including those who own or control – directly or indirectly – more than 25 per cent of the firm.

Palmers are urging companies across the UK to keep a regularly updated PSC register available for public inspection.

BJ Chong, Partner and Company Law Specialist at Palmers, said: “This is a significant change to company law and will affect almost all UK companies.

“Even if a company has no interests to be registered or it is dormant, it must still keep a register, as criminal sanctions may apply for non-compliance.”

The changes did not stop there. Between the introductions of a new state pension scheme, financial penalties imposed for non-payment of tribunal awards and regulations requiring certain public-sector employees to repay exit payments upon re-joining the sector, April brought with it a minefield of changes.

Palmers Solicitors specialise in advising on all aspects of employment law. For more information, please contact our employment team at