There has been much speculation over the last three months as to the extent to which UK employment law will be affected by the Brexit decision. It is clear, however, that speculating about what laws may change is speculation in itself, and we will not know what the impacts will be for some time yet.
However, the more immediate impact of Brexit is on the timing of new laws that were previously due – it appears that the Government machinery in producing these new laws has slowed, and we are seeing real delays in the launching of consultations and the publication and implementation of new laws.
The delay which is probably of greatest significance to larger employers is to the publication of the final version of the gender pay gap legislation. Although it was expected that these regulations would be published in the summer and come into force on 1 October 2016, the implementation date has been delayed until April 2017 – and we are still waiting for the final regulations.
That said, we anticipate that the first reports which will need to be made under the new law will still be due by the end of April 2018, as originally proposed. Employers will just have less time to act if they have to deal with any last minute changes.
The gender pay reporting rules will apply to private and voluntary sector employers with at least 250 employees, and the government has recently launched a consultation on extending gender pay reporting to include large public sector employers.
The consultation on grandparent leave which was expected this summer has also been delayed.
In October 2016, only limited employment law changes are coming into force:
National Minimum Wage (NMW) - rate increases
From 1 October, the following new hourly rates apply:
Workers aged 21 to 24: £6.95
Development rate: £5.55
Young workers (workers aged 16 or 17): £4.00
The National Living Wage (NLW), the minimum rate payable to employees aged 25 and over, will not increase from the current rate of £7.20 per hour.
Corporate Directors – ban
A ban on "corporate" directors is expected to come into force in October 2016. The general condition that company directors must be natural persons (i.e. actual people) is one of a number of measures which the UK committed to during the G8 summit in June 2013 to enhance corporate transparency. There will be a grace period of 12 months from the date the new law comes into force, after which any corporate directors will cease to be directors by operation of law.
Finally, an additional employment law change is on the horizon:
Tax-free Childcare Scheme
Under the new scheme, which is expected to be launched in early 2017, eligible working families may be able to claim up to 20% of their yearly qualifying childcare costs for children under five and for children with disabilities under 17.
After this tax-free childcare scheme has been launched, employers cannot offer childcare vouchers on a tax-exempt basis under the current employer-supported system to new employees. However, employees who are already on that voucher system can remain on it while their employer continues to operate it. For employers which currently offer childcare vouchers through salary sacrifice, giving them a NICs saving, this change may involve a significant cost.