This year’s April employment law changes have brought us a couple of really big hitters: the start of the Apprenticeship Levy; and Gender Pay Reporting obligations. However, there are also other changes which might not have been so visible on employers’ HR radars. So, here’s EEF’s quick round up of this years employment law Spring Collection.
For many employers, the biggest employment impact this April is the start of the Apprenticeship Levy.
The Finance Act 2016 provided for the introduction of the Apprenticeship Levy, part of the Government’s initiative to fund three million new apprenticeships by 2020. The first collection of the Levy, payable via PAYE (alongside income tax and national insurance) at a rate of 0.5 per cent on pay bills of £3 million or more, will take place in May, but will be based on April’s payroll figures.
For further guidance on the operation of the Levy and how EEF can provide on-going support and assistance to employers to ensure they get the most from their Apprenticeship Levy contributions, see our Apprenticeship Levy webpage.
Gender pay reporting
One of the most trailed developments, the Gender Pay Reporting Regulations come into force in relation to private employers with effect from today, 6 April 2017. The Regulations require organisations with 250 or more employees to report on their gender pay gap figures. The first reports must include a snapshot from the pay period covering 5 April 2017. The required data must be published within 12 months of the snapshot date, on both the relevant company’s website and a designated Government website. For further information, click here.
National Living Wage (NLW) and National Minimum Wage (NMW) increases
From 1 April 2017 the NLW (applicable for those 25 and over) increased to £7.50 per hour (up by 4.2% from the previous rate of £7.20 an hour).
Other NMW rates that increased from 1 April 2017 are as follows: £7.05 (21- 24 year olds), £5.60 (18-20 year olds), £4.05 (16-17 year olds) and £3.50 for apprentices in their first year of an apprenticeship.
Statutory family-related pay and sick pay rates increase
The weekly rate of statutory maternity, paternity, adoption and shared parental pay increased to £140.98 for weeks commencing on or after 2 April 2017.
The rate of statutory sick pay increases from today, 6 April 2017, to £89.35.
Statutory redundancy pay increase
Today also sees an increase in the maximum weekly rate for calculating statutory redundancy pay, it is now £489.
Increase in compensation limits
The maximum compensatory award for unfair dismissal will rise to £80,541 (up from £78,962) where the effective date of termination is on or after 6 April 2017.
Members can find a table of employment maximum rates and limits here.
Restrictions on salary sacrifice benefits
Salary sacrifice arrangements entered into on or after 6 April 2017 will no longer benefit from tax and employer National Insurance advantages. Pension contributions (and advice), childcare vouchers, cycle to work, and low emission cars are not affected by these changes.
Existing salary sacrifice arrangements in place before 6 April 2017 will be protected until April 2018.
There are no changes for salary exchange provisions for non-tangible benefits, such as purchase of additional holiday entitlement.
Immigration Skills Charge
Today also sees the introduction of an immigration skills charge, which applies to no EU workers sponsored by their employer as skilled workers under Tier 2 of the UK points based immigration system. The charge is currently set at £1,000 per certificate of sponsorship per year (although there are some exceptions and discounts for smaller employers and charities).
The Great Repeal Bill
Ok, so not really an employment law change per se, and in any event unlikely to take effect for at least two years, but following the UK’s triggering of Article 50 last week, the Government has published its White Paper on its proposed Great Repeal Bill. When passed, the Great Repeal Act will repeal the European Communities Act 1972, (the Act which gives supremacy to EU law and EU institutions in the UK), as at the date the UK finally leaves the EU. EU law in force at that date will then become UK law, (subject to the exercise of secondary legislation to correct any elements of EU law which would not otherwise operate effectively in UK).
Following the UK’s exit from the EU, UK courts and tribunals will no longer need to take account of new European Court of Justice (ECJ) rulings. However, importantly from an employment law perspective, ECJ judgments made before our exit will be given the same status as if they were decisions of the UK Supreme Court, i.e they cannot be overturned or interpreted differently by lower UK courts and tribunals. So, only the UK’s Supreme Court departing from a pre-exit ECJ decision, or a change in UK legislation, will ‘reverse’ the impact of pre-exit ECJ judgments. This is particularly relevant when it comes to the issue of holiday pay as, post Brexit, UK lower courts will still have to follow ECJ rulings, such as Williams and others v British Airways plc
and Lock v British Gas Trading Ltd
, unless or until the Supreme Court, or Parliament, intervenes.
So how can EEF help?
As always, we will continue to regularly update you on the evolving HR and employment law agenda. In addition, keep an eye on our extensive and regularly updated programme of seminars & events - a great way to supplement your knowledge and really get to grips with the practical implications of legislation, policy and case law developments.