Employment Law changes in 2017

Employment law is perhaps one of the fastest changing areas of law, and 2017 is looking like no exception.

There are a number of important cases going through the Employment Tribunal system. Many of these cases may have huge repercussions for businesses, and for employees in areas such as the definition of ‘workers and employees’ and in areas of discrimination. There are also a number of changes to the law coming up in 2017 that employers need to be aware of – and we’re going to look at these changes in this blog.

The Apprenticeship

From April 2017, larger employers will start making a contribution to help fund apprentices. The amount they have to pay is a percentage (0.5%) of the total payroll bill, and applies to employers with a pay roll bill of over £3 million a year. Employers will then be able to access this pot to fund apprenticeships from accredited training providers.

Employers with a salary bill of 3 Million or more or a connection to a company with a salary bill of that size will have to:-

  • work out how to apportion their “Apprenticeship Allowance” of £15,000
  • report how much Apprenticeship Levy they owe on their Employer Payment Summary
  • keep records for at least 3 years from the text year they relate to

You can find more information from the Government’s website [https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work]

Abolition of salary sacrifice schemes

April is the month that many salary sacrifice schemes will be abolished, meaning that these forms of employee benefit in the form of tax savings will not be available. Salary sacrifice schemes relating to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars are protected, but other schemes will lose their special tax status. All schemes are protected until 2018, with schemes relating to accommodation, cars and school fees are protected until 2021.

Employers will have to:-

  • decide whether to keep these schemes running for as long as the protection remains in place, or start to abolish them as the employer National Insurance incentives of these schemes are being abolished

Employees will have to:-

  • decide if it’s worth opting in to such a scheme before April in order to gain any remaining benefits
  • decide if it’s worth staying in such a scheme after the tax benefits are removed – there may be some residual benefit such as the ability to spread the costs of a purchase to which the scheme applied without using credit

Immigration Skills Charge & minimum salary requirements for foreign workers

April sees the introduction of the Immigration Skills Charge. Employers sponsoring a foreign worker with a tier 2 visa (for workers coming from outside the European Economic Area) will have to pay £1,000 per worker per year. The charge will be on top of the fees relating to the visa application. The charge is lower for small employers and charities – at £364. The minimum salary requirement for workers coming in on a tier 2 visa increases to £30,000 in April.

National Minimum Wage changes

The National Living Wage increases to £7.50 in April 2017. The National Minimum Wage rates also increase, as follows:

  • £7.05 per hour - 21-24 yrs old
  • £5.60 per hour - 18-20 yrs old
  • £4.05 per hour - 16-17 yrs old
  • £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

Gender Pay Gap Reporting for firms with more than 250 employees

Employers with more than 250 employees will need to start providing information relating to employees’ pay and bonuses, and information relating to the number of men and women in each quartile of the pay distribution. Draft regulations are available which set out what must be recorded.

Employers will have to:-

  • Identify relevant employees and calculate their hourly rate for the period concerned (there is a ‘snapshot’ date of 5th April 2017 for the first reporting period).
  • Calculate the quartile pay bands
  • Report the findings within a year of the snapshot date.

General Data Protection Regulation

This EU regulation will come into force in 2018 and before the UK leaves the EU, so employers cannot ignore the GDPR.

Employers will have to:-

  • Audit employee data to make sure it complies with the requirements under the GDPR for employee consent
  • Create (or amend) policies and processes relating to privacy notices, data breach responses and subject access requests to bring them in line with new governance and record-keeping requirements.

If this all feels like a lot to cope with, why not get in touch with our employment law team. They can offer you expert advice to help you make any adjustments you need to make sure your business is up to date with all these forthcoming changes in employment law.