28/03/2017

Key Employment Law Changes in April 2017

NEWS

This newsflash looks at the key employment law changes taking place in April 2017.

DETAILS

Increase in Statutory Payments

From 1 April 2017, the National Minimum Wage will increase as follows:

  • 16 – 17 year olds: £4.00 to £4.05 per hour;
  • 18 – 20 year olds: £5.55 to £5.60 per hour; 
  • 21 and over: £6.95 to £7.05 per hour; 
  • 25 and over: £7.20 to £7.50 per hour (National Living Wage);
  • Apprenticeship rate (for apprentices under 19 years old or over 19 but in the first year of their apprenticeship): £3.40 to £3.50 per hour.

From 2 April 2017, Statutory Maternity, Paternity, Adoption and Shared Parental Pay will increase from £139.58 to £140.98 per week.

From 2 April 2017, Statutory Sick Pay will increase from £88.45 per week to £89.35 per week. 

From 6 April 2017, compensation and redundancy payments will increase as follows:

  • The cap on a statutory week’s pay will increase from £479 to £489;
  • The maximum Basic Award for unfair dismissal will rise from £14,370 to £14,670;
  • Statutory Redundancy Payments will be capped at a maximum of £14,670 (from £14,370);
  • Compensatory Awards for unfair dismissal will increase to a maximum of £80,541 (from £78,962) or a year’s gross pay, whichever is lower.

Apprenticeship Levy

From 6 April 2017, all businesses with a wage bill of more than £3 million will be liable to pay the levy at a rate of 0.5% of payroll (subject to a £15,000 annual allowance). The Government will apply a top up of 10% to the levy funds for spending on apprenticeship training in England i.e. for every £1.00 the business pays, it will get £1.10.  

The funds will be accessible through the Digital Apprenticeship Service which has been set up by the Government so that businesses can choose which apprenticeships they want to run. However, funds will expire 24 months after they enter the account.

Gender Pay Gap Reporting

From 6 April 2017 (31 March for the public sector), gender pay gap reporting regulations come into force for employers with 250 or more employees. The report has to set out the following information: 

  • Difference in mean and median hourly pay between male and female employees;
  • Difference in mean and median bonus pay between male and female employees;
  • Proportion of male and female employees who received bonuses; and
  • Proportion of male and female employees in each of 4 pay quartiles.

Private sector employers must publish their report by 4 April 2018 (and every year thereafter) and public sector employers must publish their report by 30 March each year.  The Report has to be published on the employer’s website for 3 years and uploaded to a designated Government website.

Salary Sacrifice Schemes

From 6 April 2017, the Government will limit the tax and National Insurance advantages available to employees through a salary sacrifice arrangement to the following benefits:

  • Contributions to a registered pension scheme;
  • Employer provided pension advice;
  • Childcare vouchers;
  • Cycle to work schemes; and
  • Ultra-low emission cars.

Existing arrangements in place before 6 April 2017 will continue until 6 April 2018, or until 6 April 2021 for cars, accommodation and school fees.

COMMENT 

Hannah Ball comments: "April is always a key month for changes in employment law, and the two key obligations for larger organisations are the introduction of the Apprenticeship Levy and Gender Pay Gap Reporting. At Howes Percival, our experienced team of Employment lawyers can assist your organisation to prepare for and implement the necessary action to adhere with changes in the law.

If you require further assistance, please contact a member of the team