This article takes a look at some of the key changes anticipated for employers in 2017.
In 2017, Article 50 of the Treaty on the European Union will be triggered. It is due to happen at the end of March 2017 but that will only be the start of a very long process. It remains to be seen what will happen to UK employment legislation derived from Europe. The biggest issue initially is likely to be what is to happen to the free movement of persons and the labour on which the British economy relies. Most employers have workers from the EU on which they rely and will be keen to see how this develops. Watch this space!
Gender Pay Gap Reporting
The final regulations have now been published (subject to parliamentary approval) and are expected to come into force on 6 April 2017. An employer with 250 or more employees will be required to publish information relating to the gender pay gap within their organisation. In particular, they will be required to publish the difference between the mean and median hourly rate of pay paid to male and female employees; the difference in mean and median bonus paid to male and female employees; the proportions of male and female employees who receive bonuses and the relative proportions of male and female employees in each quartile pay band.
An employer with 250 or more employees as at 5 April 2017 will have 12 months from 5 April 2017 (i.e. 4 April 2018) to publish the required information and therefore employers with 250 or more employees on 5 April 2017 will have to spend 2017 (and the remainder of the 12 month period in 2018) collating the necessary information, deciding what information to publish (and whether to go above and beyond the requirements within the Regulations so as to explain any differentials) and how to deal with any potential equal pay issues and bonus arrangements.
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National Minimum Wage changes and other changes to pay
The National Living Wage for employees 25 and over will increase to £7.50 from April 2017, together with other increases to the National Minimum Wage rates. Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay and Statutory Shared Parental Pay and Statutory Sick Pay rates will also increase from April 2017. A Ministerial Statement proposes that statutory sick pay will increase to £89.35 per week and the flat rate of maternity pay etc.. will increase to £140.98 per week.
Apprenticeship Levy comes into force on 6 April 2017. Employers with an annual pay bill of more than £3m will need to pay 0.5% of their NIC pay bill for the tax year on the apprenticeship levy. Employers will then be able to access funding for apprenticeships through a new digital apprenticeship service account. The Government will apply a 10% top up to the funds that an employer has to spend on apprenticeship training in England. Funds will expire 24 months after they enter the employer’s digital account unless they are spent on apprenticeship training. Employers will need to consider their strategy for employing apprentices and how best to utilise the funding through the digital service account.
Salary Sacrifice Schemes
In the Government’s Autumn Statement of 2016 it has confirmed that with effect from April 2017 salary sacrifice arrangements will be curtailed. Going forwards the only benefits that will continue to benefit from tax and NICs relief if provided through a salary sacrifice arrangement will be: enhanced employer contributions to a registered pension scheme; childcare benefits; cycles and cyclists safety equipment provided under the cycle to work scheme and ultra-low emission cars. The limitation will take effect from April 2017. However, arrangements in place before that date will be protected until April 2018 or for cars, accommodation and school fees, until April 2021.
If you require any further information on the above or assistance with any of your compliance projects, please contact a member of the team.