From businessadvice.co.uk (Expert Advice for the engine room of the British economy)
Next month marks the busiest time of year, where major employment law changes will take effect. Here, HR director at law firm Peninsula, Alan Price, outlines the seven employment law changes employers need to be aware of this April.
(1) Gender pay gap reporting
A new law introduced on 6 April 2017 will require private sector employers (all be it those with 250 or more employees) to report on their gender pay gap each year. Employers are required to take a snapshot of their pay data on the 5 April this year, and report on specific calculations by the 4 April 2018.
The report needs to be published on the company’s website and be uploaded to a government website. Similar provisions are being introduced for public sector employers, with a snapshot date of the 31 March every year.
(2) Apprenticeship levy
From the 6 April, large employers with an annual payroll bill of more than £3m are required to pay the new apprenticeship levy – set at a value of 0.5 per cent of the value of the total pay bill, with a £15,000 allowance from the government to offset against the payment.
The levy will be paid in to a digital apprenticeship account monthly with employers having two years to spend the money on apprentice training.
(3) Increases to minimum pay
On the 1 April, the National Living Wage (NLW) will increase from £7.20 to £7.50 per hour for workers aged 25 and over. All other National Minimum Wage (NMW) rates will also increase from the same date, to £7.05 per hour for 21-24 year olds and £5.60 per hour for 18-20 year olds. The rate for those over compulsory school age but under the age of 18 will be £4.05 per hour, and £3.50 per hour for those on an apprentice’s rate.
(4) Increases to statutory payments
The weekly amount of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will increase for the first time in two years on 2 April 2017, from £139.58 to £140.98.
In addition, the rate of statutory sick pay will increase from £88.45 to £89.35 per week from 6 April. The amount an employee must earn to receive the statutory payments will also increase, from £112 to £113 per week.
(5) Tribunal compensation limits
Employers who are being taken to tribunal from April onwards will see their compensation awards increase, as new limits come in to force on 6 April. From this date, the maximum amount of a week’s pay employers will have to provide will increase, from £479 to £489, and the maximum basic award for unfair dismissal will increase to £14,670.
The maximum compensatory award for unfair dismissal will also increase from £78,962 to £80,541. This means that the total basic and compensatory award for unfair dismissal has now gone over £95,000 for the first time.
(6) Changes to foreign worker rules
Further to changes brought in last autumn, the Tier 2 minimum salary threshold will be increasing to £30,000 per year (although certain roles will remain exempt) until July 2019.
An “immigration skills charge” will be introduced, to be paid by all Tier 2 sponsors, from 6 April. This will cost £1,000 per year for each certificate of sponsorship, with a reduced rate of £364, to be paid by small and charitable sponsors.
(7) Salary sacrifice tax changes
From the 6 April this year, changes to salary sacrifice tax rules means that income tax, and class 1A employer’s national insurance contributions (NICs), will be paid on the higher value of either the amount of salary sacrificed or the cash equivalent of the benefit.
The changes will not apply to schemes for employer provided pensions, childcare vouchers, cycle to work schemes and ultra-low emission vehicles.
How can employers protect themselves against unfair dismissal claims? Find out here.
Sign up to our newsletter to get the latest from Business Advice.