Employment Law Changes – What has come into force this month?

A number of changes are taking place this month in employment law. Highlighted below are the main ones which employers should be aware of.

Gender pay gap reporting

There is a new legal requirement that UK companies with 250 or more employees will have to publish their gender pay gaps within the next year.

Public, private and voluntary sector firms are all required to disclose average pay for men and women, including bonuses, every year.

Employers in the private and voluntary sector must take a snapshot of their data on the 5 April each year, starting this year. Companies in the public sector must take a snapshot on the 31 March each year. Employers will then have 12 months to publish the information on their own website and to upload it to a Government website.

Apprenticeship levy

This change has been brought in to fund apprenticeship training. Employers that have an annual payroll of over £3 million will pay 0.5% of their annual wage bill to a new Apprenticeship Fund via PAYE. This is effectively a new tax applicable to employers that meet the threshold. Employers that pay the levy will then have access to funds through a new digital apprenticeship service account and will be able to use this to pay for training and assessment for apprenticeships in England. Funds cannot be used to pay the apprentices wages and funds will expire 18 months after they enter the Employers digital account if they are not used towards apprenticeship training.

Employers that do not pay the levy will get support from the government towards the costs of apprenticeship training. This is called co-investment. From May 2017, non-levy paying employers will pay 10% towards the cost of apprentices and the government will pay the remaining 90%.

Large public-sector employers will also have to meet apprenticeship targets.

Immigration skills charge

The immigration skills charge came into effect on 6 April. Employers that sponsor migrant workers under the point-based system will have to pay £1,000 per migrant per year. This fee is reduced to £364 for smaller employers and charities.

National Minimum Wage and National Living Wage increases

On 1 April 2017 the rates of the National Living Wage for workers over the age of 25 increased from £7.20 to £7.50 per hour.

The revised National Minimum Wage rates also increased as follows:

  • Adult rate (workers aged 21-24) from £6.95 to £7.05 per hour;
  • Workers aged 18-20 from £5.55 to £5.60 per hour;
  • Workers aged 16 and 17 from £4.00 to £4.05 per hour; and
  • Apprentices from £3.40 to £3.50 per hour. This rate is applicable to apprentices aged under 19 or in their first year of their apprenticeship.

Statutory family-related pay and sick pay rates increase

The weekly rate of statutory maternity, paternity, adoption and shared parental pay has increased from £139.58 to £140.98 per week.

The weekly rate of statutory sick pay has increased from £88.45 to £89.35 per week.

These changes effect payments due on or after the 2 April 2017.

Statutory redundancy pay increases

New limits on statutory redundancy pay came into force on 6 April. The new maximum amount of weekly pay has increased from £479 to £489.

The amount also applies to the basic award for unfair dismissal claims.

Tribunal Compensation Limits

New limits on the compensatory award for “ordinary” unfair dismissal claims has increased from £78,962 to £80,541.

This new limit will apply to dismissals that took place on or after 6 April 2017.

Tax free child care scheme

A new tax free child care scheme is due to come into force on 28 April 2017 which will replace the existing childcare vouchers scheme. The government will make a 20% contribution, but a maximum of £2,000 per year towards the cost of childcare.

If your business is affected by any of the issues raised in this update, please feel free to get in touch with our team of Employment Law experts by telephone on 0161 926 9969 or email on employment@mlplaw.co.uk.