7 Key Employment Law Changes, April 2017
April 2017 will see a number of significant changes to employment law come into effect across the UK. Here we take a look at the key changes that are coming into place.
1. Apprenticeship Levy
From 6 April, large employers are required to pay an apprenticeship levy of 0.05%. The levy will only be paid on annual pay bills in excess of £3 million, and so less than 2% of UK employers will pay it. Each employer will receive an allowance of £15,000 to offset against their levy payment. Smaller employers that do not pay the levy will also be able to receive government funding towards the costs of apprenticeship training and assessment by contributing 10% towards the cost of an apprenticeship with the government paying the remaining 90%. For more information regarding these changes you can read our blog: The Apprentice Levy, what it means for SMEs.
2. Increase to Statutory Payments
On 2 April, the weekly amount of statutory maternity pay, statutory shared parental pay, statutory paternity pay and statutory adoption pay will increase from £139.58 to £140.98. On 6 April the weekly amount for statutory sick pay is also set to increase from £88.45 to £89.35. To be eligible for the above payments the individual average earnings must be equal to or higher than the lower earnings limit which is also set to increase from £112 to £113 in April 2017. For more information regarding these changes you can read our blog: April sees an increase to statutory payments.
3. Increase to National Minimum and Living Wage
On 1 April, the following increases will be made to the National Minimum Wage and National Living Wage National Living Wage rate: 25 and over: £7.50 from £7.20 National Minimum Wage rates: 21 - 24 Years: £7.05 from £6.95 18 - 20 Years: £5.60 from £5.55 Under 18: £4.05 from £4.00 Apprentices: £3.50 for those under 19 or those in the first year of their apprenticeship. Apprentices over 19 or who have completed the first year of their apprenticeship are entitled to the minimum wage rate for their age. For more information regarding these changes you can read our blog: Minimum wage rates to increase from 1 April.
4. Salary sacrifice tax changes
On 6 April, Benefits-in-kind offerings as tax savings through many salary sacrifice schemes are to be limited. Any scheme entered into before this date will be protected until April 2018 except for cars, accommodation and school fees when the last date is 6 April 2021. Some schemes that will not be affected include: employer provided pension saving and advice, childcare vouchers, cycle to work scheme and ultra-low emission cars.
5. Changes to foreign worker rules
Employers that sponsor foreign workers with a tier 2 visa will be required to pay an immigration skills charge of £1,000 per employee or £364 for smaller organisations and charities from 6 April. This will be an additional charge to current fees for visa applications. The tier 2 minimum salary threshold will be increasing to £30,000 per year. New entrants to the job market and some health and education staff will be exempted from the salary threshold until 2019.
6. Gender pay gap reporting begins
A new law is being introduced that will require all relevant employers in the public, private and voluntary sector with 250 or more employees, to publish gender pay gap information by reporting the percentage differences in pay between their male and female employees. Employers will be required to take a data snapshot of their pay data on 5 April 2017 (for private and voluntary sector) and report on specific calculations by 4 April 2018 and 31 March for public sector organisations. The report must be published on their website and on a government website.
7. Reforms to public sector exit payments
Reforms to public sector exit payments are set to come into place in June 2017, to ensure greater consistency between public sector redundancy compensation schemes and value for money for the taxpayer. A cap of £95,000 will be put on for all public sector workers who leave their roles including as a result of redundancy or voluntary exit. Any employee that earns over £80,000 will be required to repay exit payments if they return to any public sector role within a year of receiving an exit payment.
It is important for all businesses to be aware of the changes being made in April 2017 and how these changes may affect their business. It is also important for all changes to be implemented by their relevant dates.
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