The success of any business is inextricably hinged on whether or not it effectively implements employment laws. Adherence to labour laws might be the key determiner of whether a company retains its employees or it loses them while simultaneously getting into trouble with the law. There are five key employment law changes that every startup should ensure it does not overlook if it wishes to sail smoothly in the murky waters of the labour market.

Pension auto-enrolment law

The law requires that businesses enrol all their employees to a pension plan. The government delayed the employer pension contribution increment, meaning the 2% minimum is set to be effected in April 2018 and the 3% minimum in April 2019. 

Statutory pay changes

Startups similarly need to make sure they cover their new statutory payment obligations after the government effected new statutory compensation laws in April this year. The statutory rates of payment for sick leave, maternity, paternity, shared leave and adoption have all increased.  The statutory payments for Maternity, Paternity, Shared Parental Pay and Adoption pay have risen by £1.40 per week to 140.98 per week. The Statutory Sick Pay, on the other hand, has increased from £88.45 per week to £89.35 per week. These statutory payments are applicable on condition that the employee’s average earnings are equal to or greater than the lower earnings limit which increased from £112 to £113 per week.

Increased National Minimum and Living Wage rates

Moreover, startups are also subject to the increased rates for National Living Wage and National Minimum Wage. The new labor laws raised the National Living Wage for employees aged 25 years and older from £7.20 per hour to £7.50 per hour. The National Minimum Wage rates also changed and now employees are entitled to a Minimum Wage spanning between £3.50 per hour (for apprentices aged 19 or younger) to £7.50 per hour (employees aged 25 and above).

Apprenticeship Levy

Also, businesses with over £3 million salary bills are now required to contribute funding towards the cost of UK apprentices through the Apprenticeship Levy. The government introduced a scheme of co-investing for start-ups which may feel inclined to apply for training apprentice workers. Businesses which do not contribute to the Apprenticeship Levy are now required to contribute 10% of the apprentice-training fee while the government pays the remaining amount.

Reporting on Gender Pay Gap

The law requires all businesses with more than 250 employees to collect and publish data regarding the gender pay gap. This requirement was effected on the fiscal year beginning April 2017 and the facts and data collected should be published in April 2018. This is a government policy geared at bridging the pay gap between genders and encourage more equality between the sexes inclusivity in the labor market.

Businesses will do well to adhere to these laws to help create a fair working and remuneration environment for all workers in the UK labour market. For more information on this, please contact us.


You Might Also Like


Sign up to our Email Newsletter

Want more news, insights and blog articles like this?
Sign up to our newsletter and get bi-weekly updates direct to your inbox.
Sign up
Thank you for signing up to our newsletter.