There are a number of new employment law developments and changes coming into force in April 2017. Let’s take a look at some of them:
- Gender Pay Gap reporting
New laws become effective from April 2017 affecting larger employers with 250 or more employees. These organisations will have to produce data about their gender pay gap, which also includes data about bonuses. There is also a duty to report on the proportion of male and female employees in different pay quartiles including bonus details. Pay data must be based on a snapshot of pay data on all employees every April commencing in April 2017. Organisations in the public sector must use 31 March as their relevant snapshot date every year. Gender Pay Gap details must be disclosed on the Employer’s website within a period of 12 months. There is also a further duty to upload this data to a Government website.
- Increases to the National Minimum and Living Wage
The National Living Wage affecting employees aged 25 and over increases from £7.20 an hour to £7.50 effective from 1 April 2017.
There are also additional new rates to the National Minimum Wage affecting other age brackets as follows: –
- £3.50 for apprentices under 19 or 19 or over who are in the first year of an apprenticeship.
- £4.05 per hour – 16-17 yrs old
- £5.60 per hour – 18-20 yrs old
- £7.05 per hour – 21-24 yrs old
- Changes to salary-sacrifice schemes
On 6 April 2017, various benefits in kind which currently attract income tax and national insurance advantages when provided under a salary-sacrifice scheme are to be limited. The Chancellor of the Exchequer announced these changes last year as part of his Autumn Statement. The changes are likely to affect benefits such as gym membership, mobile phone contracts and health checks that are offered as part of a salary-sacrifice scheme. No changes however will be made to child care, pensions savings and cycle to work schemes which will continue to be exempt. Arrangements made before 2017 will be protected until April 2018. Arrangements for cars, accommodation and school fees will be protected until April 2021. The rationale behind these changes is that the Government believes that the growth in these schemes is impacting on lost income tax and national insurance contributions.
- New Apprenticeship Levy introduced
The Government’s apprenticeship levy to fund and promote apprenticeship training as an alternative to full time further education is coming into force on 6 April 2017. All employers who have a payroll bill in excess of £3 million will have to pay a monthly levy. Small employers that do not have to pay the new levy will be able to access funding for apprenticeships and this new system of funding is expected to start from May 2017.
- New Immigration Laws
From 6 April 2017 employers that sponsor skilled workers under Tier 2 of the immigration points based system will now have to pay a levy of £1,000 for each sponsorship. Small employers and charities will only have to pay £364. In addition, workers arriving in the UK under Tier 2 for positions in education, social care and healthcare must now obtain criminal record certificates from the countries that they have resided in for the past ten years. The Tier 2 salary threshold is also increasing to £30,000.
From 6 April 2017, a weeks’ pay for the purposes of calculating statutory redundancy pay increases from £479 to £489. The maximum basic award increases from £14,370 to £14,760 and the maximum compensatory award increases from £78,962 to £80,541.
- Increases to statutory maternity, paternity, adoption, shared parental leave and statutory sick pay
From 2 April 2017, statutory maternity, paternity, adoption and shared parental leave weekly rates increase from £139.58 to £140.98. From 6 April 2017, statutory sick pay weekly rates increase from £88.45 to £89.35.
New developments affecting worker status
There have recently been further case law developments on the status of workers in the so called ‘Gig economy’. In Boxer -v- Excel Group Services Ltd (in liquidation) an employment tribunal has ruled that a cycle courier who was labelled as a contractor was in fact a worker. This entitled him to various employment rights including the right to holiday pay, statutory sick pay and the national living/minimum wage. The employment tribunal held that the arrangements in place and the contract signed by the parties did not reflect the reality of the situation. The main influencing factor for the employment tribunal was that Excel controlled Mr Boxer and the lack of bargaining power that he had when signing his contract that labelled him as a contractor. It is likely that we will see more developments where these arrangements are being challenged. The Government is also likely to legislate at some point in the near future to promote employment rights for individuals working in this new economy.
Please call Steven Eckett, our employment solicitor, on 020 7998 7777 for more information or email him at firstname.lastname@example.org.