April is a busy month for a lot of businesses with the start of a new financial year for most. This can take up a lot of time with other important projects/factors often slipping down our priority lists. However, items on that list that we must not forget are those that directly affect both businesses and employees.
In April 2017, we have seen 9 changes to Employment Law here in the UK. The key 5 of those, are set out in our summary below:
What is the national minimum wage? It’s the minimum amount that every worker is entitled to be paid. There are different levels, depending on the worker’s age.
On April 1st, the rates for the national minimum wage increased, despite an increase in most rates on 1 October 2016.
This is so that the timing of the annual increase in the national living wage rates for workers aged 25 or over can align with other national minimum wage rates.
The rate for workers aged 25 and over (the national living wage) increased from £7.20 to £7.50. The rates within the other age bands also increased.
The gender pay gap reporting duty is now in force for employers in the private and voluntary sectors from 6 April 2017, and for employers in the public sector from 31 March 2017.
The duty applies to employers with 250 or more employees and requires employers to publish specified information on the difference in pay and bonuses between their male and female employees.
Employers must identify which employees are covered by the reporting duty and calculate an hourly rate of pay for each of them. They must then perform a number of different calculations, for example the difference in mean pay between men and women, and the proportion of men and women who received a bonus. The required information must be published on the organisation’s website within a specified time frame.
There are separate Regulations setting out the gender pay gap reporting duty for employers in the public sector with 250 or more employees. These Regulations largely mirror those for the private and voluntary sectors but with different dates for gathering and reporting information.
What is the levy? From 6 April 2017, UK employers will now have to fund the costs of apprenticeship training and assessment. The levy has been set at 0.5% of an employer’s pay bill.
Each employer has an annual allowance of £15,000 which will be offset against the levy. In effect, only employers with a pay bill of more than £3million will be liable to pay the levy (because 0.5% of £3million is £15,000). Companies and charities that are connected in a group structure have one £15,000 allowance to share between the group. The levy is paid through PAYE on a monthly basis. The allowance will also be applied on a monthly basis and any unused allowance can be carried forward to the next month.
The new online apprenticeship service will distribute the funds raised by the levy for employers to use on apprenticeship training and assessment in England. Separate arrangements for funding apprenticeships in Scotland, Wales and Northern Ireland have also been put in place.
The Government has published guidance for employers on the apprenticeship levy and the new funding system. Check it out here: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
Also on the 6th April 2017, an immigration skills charge came into effect for employers that sponsor skilled workers under tier 2 of the immigration points-based system. The employers that fall into this bracket will have to pay a levy of £1000 per certificate of sponsorship per year (£364 for small employers and charities).
The levy will apply in relation to each worker under tier 2, although there are some exemptions.
Other changes affecting employers that employ workers under tier 2 are as follows:
(a)The Government has now also introduced a requirement for workers coming to the UK under tier 2 for certain posts in the education, social care and health sectors, to obtain criminal records certificates from the countries that they have lived in over the last 10 years.
(b)The tier 2 (general) salary threshold has increased to £30,000 for migrants who are “experienced workers”.
Salary sacrifices (where you offset some of your pre-tax earnings for things such as cars, childcare etc) have been a useful tool for businesses over the years but since 6 April, things have changed. From then on, only new schemes for pensions, childcare, equipment provided under the cycle to work scheme and ultra-low emission cars will benefit from the tax and NI relief.
Existing schemes will be protected until April 2018 (or April 2021 for cases, accommodation and school fees).
Other employment law changes now in place include: Statutory Redundancy Pay Increases, Statutory Family Related Pay and Sick Pay Rates Increases, Pensions Advice Allowances Introduced and also Reform of the Intermediaries Rules (IR35) in the public sector.
Our Employment Law experts are on hand to help businesses navigate through the minefield that employee issues can bring. Contact us today to discuss your needs on 0330 107 0107 or email us at: info@imd.co.uk.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
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