Now that the mince pie overload, carol-singing and holidays are behind us, it’s time to get to grips with what looks set to be a busy year in terms of pay and reward issues.
Here are a few of the highlights:
- This is one of the biggies for 2016. The Living Wage is being introduced on 01 April 2016 for all employees aged 25 and over. Firms need to plan now to cost its introduction and also, to assess its impact on other roles as job relativities may as a result, be eroded and require some attention. As the Living Wage is also set to increase substantially over the next few years, this is likely to be a talking point for some time to come.
- Also for 01 April 2016, but receiving less press attention thus far, is the requirement for public sector employees who earn in excess of £100,000 per annum, to repay any exit payments, if they return to the same sector within 12 months. Further changes to restrict the amount of such exit payments to c. £95,000 are also to follow although an exact implementation date has not yet been released.
- With a background of low inflation, Statutory Sick Pay (SSP) and other statutory parental rates are likely to be frozen this year. For employers (especially those paying statutory rates only), this may be a welcome respite from other pay pressures but for employees, this news is likely to be less welcome.
- Another biggie: gender pay reporting. New equal pay legislation will require employers in the private and voluntary sectors with at least 250 employees to publish information about the pay of their male and female employees. This new legislation is expected to be finalised soon. No date has been given for the law to take effect but its requirements are likely to start this year and be phased-in, in terms of employer size (with the largest employers going first). This is likely to be a huge change for many employers, especially where pay data is debated in secret and systems to set and review pay (both internally and with the wider marketplace) are less than robust. With the planned roll-out to these larger employers, this increased openness and robustness over pay is surely a sign of where the overall expectations of the government is heading. All employers therefore would be wise to consider whether their systems could hold up under such equal pay scrutiny and if not, plan to take action to audit their current processes and consider any improvements to address these.
As the team at Navigator are well versed in all things pay and reward, please get in touch if you need some help in this area.
If you have any questions on any of the issues raised in the above article, please contact Wendy Meiklejohn