Business owners and HR personnel need to be aware of the imminent changes from 1st April 2017 due to new employment legislation coming into force.
The most significant development will be the introduction of the gender pay gap reporting duty for larger employers. However, there are a number of other key changes affecting all employers, regardless of size and summarised below:
- National minimum wage increases – 1st April 2017
- The draft National Minimum Wage (Amendment) Regulations 2017 are expected to come into force on 1 April 2017.
- The national living wage for workers aged 25 and over will increase from £7.20 to £7.50 an hour.
- The rates of other minimum wage bands will also increase. These increases are despite an increase in most rates on 1 October 2016. The Government’s approach is so that the timing of the annual increase in the national living wage rate for workers aged 25 or over can align with the other national minimum wage rates.
- Training providers banned from using the word “apprenticeship” – 1st April 2017
- The Enterprise Act 2016 (Commencement No. 3) Regulations 2017 (SI 2017/346) will come into force on 1 April 2017.
- The regulations bring into force sections 22, 23 and 25 of the Enterprise Act 2016, establishing the Institute of Apprenticeships and creating an offence which bans training providers in England from using the word “apprenticeship” except to describe a statutory apprenticeship.
- Mandatory gender pay gap reporting rules come into force – 6th April 2017
- The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) will come into force on 6 April 2017.
- Each year, large private and voluntary sector employers (defined as those with 250 or more employees on 5 April of each year) will be under an obligation to report data about their gender pay gap data including bonus payments.
- They will also have to report on the proportion of male and female employees in different pay quartiles and those who receive bonuses.
- Employers in the private and voluntary sector must base their pay data on staff employed on a “snapshot” date of 5 April each year, starting from April 2017.
- Bonus information must be based on the preceding 12-month period.
- Organisations in the public sector must use 31 March as their snapshot date.
- Employers have 12 months to publish the information on their own website and to upload it to a Government website. Therefore, employers in scope need to make sure that they can capture the necessary data.
- Statutory family-related pay and sick pay rates increases – 6th April 2017
- The Social Security Benefits (Up-rating) Order 2017 (SI 2017/260) raises the weekly level of statutory maternity, adoption, paternity and shared parental pay to £140.98.
- Statutory sick pay rises to £89.35 per week on 6 April 2017.
- Statutory redundancy pay increases – 6th April 2017
- New limits on employment statutory redundancy pay come into force on 6 April 2017.
- Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age.
- The weekly pay is subject to a maximum amount. From 6 April 2017, this will be £489.00 which will be an increase from the current rate of £479.00.
- Apprenticeship levy is introduced – 6th April 2017
- The apprenticeship levy to fund apprenticeship training is due to come into effect on 6 April 2017. Employers will pay the monthly levy via PAYE if they have a paybill of more than £3 million.
- Employers in England that pay the levy will be able to access funding through a digital service. The new system of funding is expected to operate from 1 May 2017.
- Employers that do not pay the levy will also be able to access funding for apprenticeships.
- There will be an immigration skills charge – 6th April 2017
- Employers that sponsor skilled workers under tier 2 of the immigration points-based system will have to pay a levy of £1,000 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.
- From April 2017, the Government is planning to introduce a requirement for those 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
- Reform to the intermediaries rules (IR35) in the public sector – 6th April 2017
- The intermediaries rules (IR35) may apply where an individual supplies his or her services to a client via an intermediary, such as a personal service company.
- If the individual could be regarded as an employee if the intermediary did not exist, the rules apply and the intermediary must make deductions for income tax and national insurance contributions (NICs) on the salary and wages that it pays to the individual.
- New rules are expected to apply in relation to payments made from 6 April 2017 by public authorities paying a personal service company or other intermediary.
- The public authority will have responsibility for establishing if the intermediaries rules apply and, if they do, making the tax and NIC deductions.
- Tax advantages under salary-sacrifice arrangements to be limited – 6th April 2017
- Benefits-in-kind attracting tax and NIC advantages when they are provided under a salary-sacrifice scheme, are to be limited.
- This change is expected to take effect from 6 April 2017, with some exemptions.
- Arrangements already in place are protected until April 2018, and until April 2021 for some benefits.
- Pensions advice allowance is introduced – 6th April 2017
- Members of defined-contribution and hybrid pension schemes will be able to take a tax-free amount of £500.00 from their scheme, to be redeemed against the expense of financial advice.
- It is expected that this allowance will take effect from 6 April 2017.
- The value of pensions advice provided by employers on which there is tax and NIC relief will increase from £150.00 to £500.00
Farleys Solicitors LLP specialise in a commercial employment law & HR for businesses. Advice and support includes contracts of employment, staff handbooks, directors service agreements, apprentices, equal pay, recruitment, restructures, disciplinaries, grievances, employee exits, settlement agreements; and Employment Tribunal defence and representation.
If you require any assistance with any of the above please contact Farleys Employment Law & HR team on 0845 287 0939 or send an enquiry through our online contact form and we will be in touch with you.
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