April 2017 Employment Changes

April will see a variety of employment law changes. Here is an overview of the main changes.

Apprenticeship Levy

The 6th April 2017 will see the introduction of the Apprenticeship Levy. Employers with an annual pay bill of more than £3 million will be required to pay a 0.5% levy on their total payroll bill.

Large employers will have access to levied amounts, along with a Government top-up of 10%, to fund apprenticeships from accredited training providers.

Smaller employers who are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10% of the cost, with the Government paying the remaining cost.

National Living Wage

The 1st April 2017 will see the national living wage for workers aged 25 and over, increase from £7.20 to £7.50 per hour.

National Minimum Wage

The 1st April will see the national minimum wage increase as follows: 

  • 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 16-17 from £4.00 to £4.05 per hour; and
  • The apprenticeship rate will rise from £3.40 to £3.50 per hour.

Statutory Redundancy Payments 

On 6th April 2017 the cap for a Statutory Redundancy Payment (SRP) will increase from £479 to £489 per week. The maximum payment will be £14,670. Employees must have at least two year’s continuous service to be eligible for a SRP.

Other statutory payments

The weekly rate of statutory maternity, paternity, shared parental leave and adoption pay will increase to £140.98, commencing on or after the 2nd April 2017.

From the 6th April 2017 the weekly rate for statutory sick pay will also increase to £89.35.

Salary Sacrifice Schemes

The Government is making changes to salary sacrifice schemes from the 6th April 2017. The following benefits will cease to offer employee tax perks or employer National Insurance Contribution advantages:

  • Accommodation;
  • Car parking at or near the place of work;
  • Company cars (other than ultra-low emission vehicles);
  • Gym memberships;
  • Health assessments;
  • Mobile phones, laptops etc.;
  • School fees; and
  • Work-related training.

Arrangements under salary sacrifice schemes that are already in places are protected until April 2018, except for those relating to accommodation, cars or school fees, which are protected until April 2021.

The following benefits are exempt from the changes:

  • Employer-supported childcare;
  • Cycle-to-work schemes;
  • Ultra-low emission cars; and
  • Pension contributions.

Changes to rules for employing foreign workers

From the 6th April 2017, employers sponsoring foreign workers under tier 2 of the immigration points-based scheme will have to pay a levy of £1,000 per certificate of sponsorship per year. The levy for small employers and charities will be £364. 

The tier 2 general salary threshold will increase to £30,000, for migrants who are “experienced workers”.

Gender Pay Reporting

The Gender Pay Reporting Regulations will come into force from April 2017. This requires organisations with 250 or more employees to report on their gender pay gap. Employers will be obligated to release information relating to salary and bonus pay.

These results must be published on the employers own website and a Government site. This means that the gender pay gap will be publicly available, including to customers, employees and potential future recruits. As a result, employers should consider taking new or faster actions to reduce or eliminate their gender pay gaps. Employers will have up to 12 months to publish this information.

An employer must publish six calculations showing their:

  1. average gender pay gap as a mean average;
  2. average gender pay gap as a median average;
  3. average bonus gender pay gap as a mean average;
  4. average bonus gender pay gap as a median average;
  5. proportion of males receiving a bonus payment and proportion of females receiving a bonus payment; and
  6. proportion of males and females when divided into four groups ordered from lowest to highest pay.

For further information of any of the topics contact Debbie Brown, dbrown@biscoes-law.co.uk or call 02392 660261.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.