Changes Afoot - Keeping Up with Employment Law in 2017

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The year 2017 is set to be a year of change in employment law according to Paul Robinson Solicitors; developments are taking place that affect and protect both employers and employees and it will be important to stay on top of changes planned.

Equality at work

By April 2018, employers with more than 250 staff will be required to publish their first gender pay gap report in respect of 2017 statistics, in line with the new Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Hayley Dear explains, “Great news for those employers whose data is positive and shows that there is no gender pay gap - this will certainly go some way to attracting potential recruits. At Paul Robinson Solicitors, we are advising smaller employers in this situation to voluntarily publish their figures too.”

The particulars of the requirements include:

  • publishing differences between the average hourly rate of pay made to male and female workers;
  • the proportions of male and female employees who receive bonuses;
  • any difference between the average bonuses paid to both genders; and
  • the relative proportions of male and female employees in each quartile pay band of the workforce.

“Our advice to clients is to work closely with payroll software providers now to ensure that the relevant reports can be prepared easily, at the relevant time.” - Hayley Dear.

Sacrificing advantages

A change, due in April 2017, affects those employees and employers who take part in salary sacrifice schemes. In a Government effort to crack down on arrangements that it views as unfair for the majority, there will be a removal of tax and employer National Insurance (NI) advantages in many cases. Exemptions will include arrangements relating to:

  • pensions (including pension advice);
  • childcare;
  • cycle-to-work schemes; and
  • ultra-low emission cars.

Hayley Dear adds, “Tax and National Insurance savings have an Exchequer cost, borne by the majority of taxpayers, hence the Government’s view of these being ‘unfair for the majority’. It is important to note, however, that arrangements in place before April 2017 will be protected until April 2018, with arrangements for other cars, accommodation and school fees being protected until 2021.”

Investing in our young people

From April this year, the Government is changing the way that apprenticeships are funded in order to improve the quality and quantity of apprenticeships in England, with the aim of meeting the target of 3 million apprenticeships by 2020.

From April 2017, an Apprenticeship Levy of 0.5% of a company’s total wage bill must be paid by all employers that have an annual wage bill of more than £3 million. Such businesses will have a £15,000 annual allowance to offset against the levy, and will gain access to a new digital account system, enabling them to pay for training and assessment for Apprentices in England, through the use of vouchers, and to search for training providers to help deliver an apprenticeship programme.

The Apprenticeship Levy for larger employers will be collected monthly, through PAYE. Employers will be able to offset £1,250 of the allowance, per month, against any levy liability - any unused allowance may also be rolled over from one month to the next. A group of connected companies will only receive one £15,000 allowance but this can be split across all companies in the group, as long is HMRC are informed before the beginning of the relevant tax year.

The landscape is also changing for SMEs: although not required to pay the Apprenticeship Levy, they can still access Government funding via the new system, from May 2017. Employers will contribute 10% towards an apprenticeship programme, and can therefore make use of a 90% funded scheme (subject to any funding caps in a particular apprenticeship area).

Hayley Dear comments: “In order to gain access to apprenticeship funding, employers will need to set up a digital apprenticeship service account via the Government website, which is now live. However, employers not paying the levy will not need to use the online service to make payments until at least 2018.”

Statutory Rate Rises

The National Minimum Wage (NMW) is set to increase from 1 April 2017, in order to be aligned with the National Living Wage (NLW) which applies to employees aged 25 and over, introduced in April 2016:

  • The NLW is currently £7.20 an hour; this will increase to £7.50.
  • The other NMW rates for younger workers and apprentices will also increase.
  • Statutory Maternity Pay will rise from £139.58 a week to £140.98.
  • With effect from 6 April 2017, Statutory Sick Pay will increase from £88.45 a week to £89.35.

Payback of Employment Tribunal Fees?

Hayley Dear asks the question as we all eagerly await the outcome of UNISON’s appeal against Employment Tribunal fees, which were introduced back in 2013. She says “We are expecting a decision in March 2017. Unfair dismissal claims in the Employment Tribunal have fallen by around 70% following the imposition of the fees regime and it is seen as a bar to justice for many. Fees continue to be a hotly debated topic, especially since the Government has given an undertaking to repay all fees with interest if the fees regime is found to be unlawful.”

With new Government regulations aiming to get young people into apprenticeships, changes to the way in which salary sacrifices work and a rise in statutory rates, employers will need to have their house in order and adapt accordingly. As with any new rules, preparation is key - forewarned is certainly forearmed when it comes to employment law.

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