The latest employment law changes you need to know

Following the Queen's Speech, the new government's legislative agenda for employment law has become more apparent. What were election manifesto policies are now being shaped into new legislation. Employment lawyer Gareth Edwards details some of the key areas of likely change in employment law and assesses what impact the changes will have upon employers in 2015 and beyond. National Living Wage The Chancellor of the Exchequer has announced that the new government will be introducing a new level of minimum wage, that will apply only to workers aged 25 and over, known as the National Living Wage. The National Minimum Wage will remain in place. The National Living Wage - which will apply from April 2016 - will be £7.20 (50p above the level of the National Minimum Wage at that date). Employers will need to consider whether their rates of pay will need to be increased to reflect this increase. Income tax and National Insurance The National Insurance Contributions Bill together with the Finance Bill will contain provisions ensuring that there are no rises in income tax rates, VAT rates or National Insurance contributions rates for individuals, employees and employers in the five year parliament. The freeze on rates is intended to assist the government's plans to create two million jobs and three million apprenticeships over the course of the Parliament. Overall the government aims to reduce red tape and bureaucracy for employers as a means to create jobs and increase employment, although interestingly the government has said that it will introduce a levy on large UK employers to fund the new apprenticeships. The government has now said that it will undertake consultation this summer with the aim of simplifying the tax and National Insurance Contributions treatment of termination payments. Back in 2012, the Chancellor asked the Office of Tax Simplification (OTS) to carry out a review of termination payments and the way that they are taxed. In its final report on employee benefits and expenses, published in July 2014, the OTS made a number of recommendations relating to termination payments, the most interesting being that the current £30,000 exemption to income tax (when paid by an employer to a worker as compensation for loss of office) should be replaced with a new system of income tax relief, applicable only in redundancy situations. How this will impact on compensation paid for other reasons, such as compensation for unfair dismissal or damages for wrongful dismissal, will remain to be seen. Immigration An Immigration Bill will introduce an offence of illegal working and will allow wages paid to illegal migrants to be seized as the proceeds of crime. A new enforcement agency will be created with powers to take action against employers who exploit migrant workers. The Immigration Bill will also make it illegal for employment agencies to recruit solely from abroad without first advertising those jobs in the UK. Full Employment and Welfare Benefits Bill The Full Employment and Welfare Benefits Bill will introduce statutory duties on ministers to report annually on progress towards achieving full employment and meeting the government's target of three million new apprenticeships. Extremism An Extremism Bill will introduce a number of measures to tackle extremism, including the ability for employers to check whether an individual is an extremist and bar them from working with children. Employment tribunals Under new regulations, the government is to impose a penalty on employers who fail to pay employment tribunal awards or sums due under a settlement agreed following ACAS conciliation. The new scheme will give enforcement officers the power to impose a financial penalty of 50% of the unpaid award subject to a minimum of £100 and maximum of £5,000. The penalty will be payable directly to the Secretary of State. The new non-payment penalties may be brought into force from October 2015. The introduction of fees in employment tribunals in July 2013 has proved a controversial decision. Many attribute the introduction of the fees to a dramatic decrease in the number of claims brought to tribunal. The total number of claims heard between April 2014 and March 2015 was 61,306; down from 105,803 over the same period in 2013/14 and 191,541 in 2012/13, the last 12-month period before the introduction of fees. Following the election, the government announced a review of the impact and effectiveness of employment tribunal fees and the fee remissions scheme for low earners. This review began in June 2015. It is clear that the government’s agenda for the coming session contains a number of significant reforms for employment law. Employers should seek to keep on top of changes in the employment law landscape as they emerge and amend their procedures accordingly. Gareth Edwards is an employment partner at law firm Veale Wasbrough Vizards.