UK employment law is a complex and ever-evolving field, with changes often driven by shifts in societal attitudes, economic conditions, and political priorities. Two areas that have seen significant changes in recent years are the National Living Wage (NLW) and immigration. These changes have important implications for Human Resources (HR) professionals, who must ensure their organisations remain compliant with the law while also managing the impact on their workforce. This article will explore the key changes in these areas and provide practical guidance for HR professionals.
Understanding the National Living Wage (NLW)
The National Living Wage (NLW) is a statutory minimum wage for workers aged 23 and over in the UK. It was introduced in 2016 to ensure that workers receive a wage that meets the cost of living. The NLW is reviewed annually and usually increases in April. The current NLW, as of April 2021, is £8.91 per hour.
Key Changes in NLW
There have been several key changes to the NLW that HR professionals need to be aware of:
The age threshold for the NLW was lowered from 25 to 23 in April 2021. This means that more workers are now entitled to the NLW.
The NLW rate has been steadily increasing since its introduction. In April 2021, it increased by 2.2% from £8.72 to £8.91.
The UK government has set a target for the NLW to reach 66% of median earnings by 2024, subject to sustained economic growth. This could see the NLW rise to over £10 per hour.
Implications for HR
The changes to the NLW have several implications for HR:
HR must ensure that all eligible workers are paid at least the NLW. Failure to do so can result in fines and reputational damage.
The lowering of the age threshold means that HR may need to adjust the wages of younger workers to meet the NLW.
The planned increases to the NLW will increase wage costs. HR will need to plan for this in their budgets and may need to review pay scales to maintain pay differentials.
Changes in Immigration Law
Immigration law in the UK has undergone significant changes, particularly in the wake of Brexit. The end of free movement has led to the introduction of a new points-based immigration system.
Key Changes in Immigration Law
Here are the key changes in immigration law that HR professionals need to be aware of:
The new points-based system treats EU and non-EU citizens equally. Workers must score a certain number of points for specific skills, qualifications, salaries, and professions to be eligible to work in the UK.
The general salary threshold has been lowered from £30,000 to £25,600. However, if the applicant earns less than this – but no less than £20,480 – they may still be eligible if they have a job offer in a specific shortage occupation or a PhD relevant to the job.
There is a new route for skilled workers, replacing the Tier 2 (General) visa. This route is open to all nationalities and includes a wider range of jobs than before.
Implications for HR
The changes in immigration law have several implications for HR:
HR must understand the new points-based system to ensure they can recruit from outside the UK legally.
The changes may make it more difficult to recruit from the EU. HR may need to adjust their recruitment strategies accordingly.
HR will need to ensure they have a sponsor licence if they want to recruit workers from outside the UK.
Conclusion
The changes in NLW and immigration law present both challenges and opportunities for HR. By staying informed and proactive, HR professionals can ensure their organisations remain compliant with the law, while also leveraging these changes to attract and retain a diverse and talented workforce.
