Spring is very much upon us and with it thoughts of the year ahead, but businesses across the UK need to be ready for a number of changes to employment law that come into place this month.
Gender Pay Gap Reporting
One of the biggest changes to come into force this month is new rules on reporting gender pay gap. These new regulations will only affect larger employers – those with 250 or more employees – who will be required by law to report data about their gender pay gap, including bonus payments.
Under the rules, they will also need to report on the proportion of male and female employees in different pay quartiles.
Their pay data must be based on staff employed on a “snapshot” date of 5 April each year, starting from April 2017, while information on bonuses must be based on the preceding 12-month period. However, large organisations in the public sector must use 31 March as their date.
Those businesses affected need to capture and publish the necessary information on their own website and upload it to a Government website, where it will be available to the public.
Employers with a payroll exceeding £3 million will need to pay the new apprenticeship levy, which will go towards the funding of training apprentices.
Employers in England that pay the levy will be able to directly access funding through a digital service, while those that do not pay the levy will be able to access funding in other ways.
Different arrangements exist around how apprenticeship funding will work in Scotland, Wales and Northern Ireland, although the levy will apply nationwide.
Immigration Skills Charge
Those businesses that sponsor skilled workers under the points-based Tier 2 visa system are now required to pay a levy of £1,000 per certificate of sponsorship per year, or £364 if they are a small employer or charity.
The Government also intends to introduce a requirement for those workers coming to the UK under Tier 2 for certain posts in the education, social care and health sectors, to obtain criminal records certificates from the countries that they have lived in over the last 10 years.
Meanwhile, the Tier 2 (general) salary threshold has increased to £30,000 from 6 April 2017 for migrants who are defined as “experienced workers”.
Reform to IR35
Currently, individuals who run personal service companies (PSCs) are personally required to report their income to HM Revenue & Customs (HMRC) and pay their tax and NICs themselves.
However, payments made from 6 April 2017 by public authorities paying a personal service company or other intermediary, will need to follow new rules.
Under the rules the public authority will have the legal responsibility of establishing if the intermediaries rules (IR35) apply and, if they do, they will be required to pay the tax and NIC deductions.
Benefits-in-kind attracting tax and NIC advantages when they are provided under a salary-sacrifice scheme are to be limited, with exceptions for some benefits such as childcare and bike schemes.
Arrangements that are currently in place are protected in the majority until April 2018, while some benefits, such as a company car, will be protected until April 2021.
National Minimum Wage
The National Minimum Wage has increased, with the rate for workers aged 25 and over, known as the National Living Wage increasing from £7.20 to £7.50.
The National Minimum Wage will also increase for 21 to 24 year olds from £6.95 per hour to £7.05, while 18 to 20 year olds will receive an additional 5p per hour – as will 16 to 17 year olds.
Pensions Advice Allowance
Members of defined-contribution and hybrid pension schemes are now permitted to take a tax-free amount of £500 from their scheme, to be redeemed against the expense of financial advice.
Statutory Sick Pay and Family-Related Rates
The weekly rate of statutory maternity, paternity, adoption and shared parental pay will increase to £140.98, while the weekly rate of statutory sick pay will also increase to £89.35.
Statutory Redundancy Pay
Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount, which has increased to £489.
It is the legal responsibility of all employers to ensure that their company and its employment and payroll policies meet these strict standards. Failing to meet them could result in a fine, or in certain cases prosecution.