Many key employment developments are geared up to take effect in 2018. Here, we set out the main employment and immigration changes all employers should be aware of as the new year sets in:
The introduction of the General Data Protection Regulation (GDPR), coming into effect on 25 May 2018, is set to be one of the most significant changes in employment law this year. The aim of the data protection overhaul is to have a consistent set of rules throughout the EU dealing with data protection. Though the UK is approaching Brexit, we will have a Data Protection Bill (to replace the current Data Protection Act 1998) which will preserve the GDPR in the UK once we have left the EU. If you have not got your head around the new rules yet, now is the time to do so as all employers will be expected to comply with various new obligations, including those relating to the processing of personal data and consent. See below for more details about the GDPR sessions we are holding to help you get ready for this change.
Gender pay gap reporting
This is something that is already in full swing and all employers (with 250 or more employees) should be aware of. However, the first reports for large public sector employers are due to be published by 30 March 2018, and those for large private and voluntary sector employers are due by 4 April 2018, less than three months away! At the time of writing, just over 600 out of an estimated 8,000 employers who must undertake the analysis have published their results so far. This means that more than 90 per cent of employers are yet to report. We can already hear the number crunching as the remaining employers race to meet the deadline.
The SM&CR rules currently apply to banks, PRA investment firms and some insurers. However, this is due to be extended to all regulated firms in the summer of 2018. This will mean that all firms authorised under the Financial Services & Markets Act 2000 will have to comply with the regime. The intention behind this is to encourage individuals working in the financial services sector to take greater responsibility for their actions, increase the ability to hold them to account and increase the transparency of those working at relevant firms by bringing them into the regulated sphere. Employers working within this sector need to be aware of the main changes that will apply to their business, so get in contact with a member of our team if you need further advice on this.
From April, all payments in lieu of notice will be subject to income tax and National Insurance. This will be followed in April 2019 with any settlement sums over £30,000 being subject to employer National Insurance contributions, potentially making settlements with employees more expensive for employers.
In April 2018, the NMW and NLW rates will increase as follows. The NLW for workers over the age of 25 will rise from £7.50 to £7.83. The NMW for workers between the ages of 21 and 24 will increase from £7.05 to £7.38, for workers between 18 and 20 it will increase from £5.60 to £5.90, for workers between 16 and 17 years old it will increase from £4.05 to £4.20 and, for apprentices under the age of 19, it will increase from £3.50 to £3.70. Employers should be ready to increase wages of those on the national limits in April. Failure to pay the minimum wage may result in employers facing penalties of £20,000 per worker in addition to a potential ban on the employer's directors from acting in such a capacity for up to 15 years.
Tier 2 (General)
From 11 January 2018, students who hold a Tier 4 (General) visa no longer have to wait for their final results to be released by their academic institution before switching to the Tier 2 (General) category. Instead, students can now make the application as soon as they have finished their course. This will not, however, apply to individuals on PHD courses.
Dependent partners of applicants in the UK under the points-based system (including Tier 1 and Tier 2) will now also be brought under the same requirements whereby they are not permitted to be out of the country for more than 180 days in any 12-month period during the qualifying period in order to qualify for indefinite leave to remain. This change will apply to partners who are granted new periods of leave after 11 January 2018. Therefore, even those partners who have already been granted leave before this date will be subject to the new rules following any grant or extension of leave post 11 January 2018. A further requirement is that dependent family members will have to prove that their relationship to the applicant is "genuine" as part of any applications after 11 January 2018.
Tier 1 (Exceptional Talent)
There are two main changes coming into effect in 2018. First, the number of visas available from this category will increase from 1,000 to 2,000 per year for the 12 months from 6 April 2018. The additional 1,000 visas will be held separately, in an unallocated pool, which will be distributed on a first come first served basis. Second, "world leaders" in their field of expertise may be able to qualify for accelerated indefinite leave to remain after three years, rather than the usual five years. This will not apply to those holding an exceptional promise visa.
From 2018, a new electronic entry clearance system is being rolled out. Now, individuals with electronic clearance will only have to present their passport or other identity document at the UK border to an immigration officer to check electronically for entry clearance. This new form of entry clearance will initially be tested with a pilot group, before being fully implemented on a wider scale.
Tier 2 visa holders
Under new rules, Tier 2 visa holders who have more than 60 days' gap between holding Tier 2 jobs will no longer be prevented from applying for indefinite leave to remain when they have accrued five years' employment in the UK. This means that applicants will no longer have to be employed continuously throughout the five-year qualifying period to be eligible for settlement.