With the new Prime Minister heading into No 10 Downing Street tomorrow, all eyes are on Theresa May to tackle that all important challenge we've come to know as....#Brexit. The Leave campaign highlighted the number of regulations that were burdening employers and consumers a like, from not being able to use certain kettles and hoovers to wonky bananas and odd shaped aubergines.
Now, manufacturers don't have any particular problem with wonky bananas (not that I'm aware of at least!) However, according to one of our previous surveys on Europe top disadvantage of being in the EU was red tape, cited by 72% of employers. Having spent most of 2014 speaking to employers about changes to holiday pay calculations, I can see why they maybe nudged towards this on our survey.
But let’s fast forward to the present. The top three issues that leave member companies shaken not stirred in the employment and skills space are:
1. The National Living Wage
Implemented by employers without being too onerous of manufacturers but still some challenges in pay differentials, changes to salary sacrifice schemes and now a question about affordability of the £9per hour target by 2020 in light of the referendum result.
2. Gender Pay Reporting
Draft regulations are now being revised with final regulations likely to be laid before Summer Recess. Add in Parliamentary debates and accompanying ACAS guidance and we’re looking at enforcement and implementation April 2017 for the first data snapshot and publication of results before April 2018, which could hit employers like a thunderball.
3. The Apprenticeship Levy
My favourite topic, if you haven’t read a blog by me on this, where have you been? – Due to come into force April 2017 at 0.5% of an employer’s total pay bill with some allowances that really aren’t that generous if you are part of a group. Limited guidance to date with the funding guidance (the really important bit) getting pushed back on a weekly basis, we have to wait - but we should never say never, again, and perhaps we will see this before the summer recess.
Now, what do all three of the above have in common?
They are not from Brussels, with love….
Subject to contrary belief, not all business regulation comes from Europe and right now there is spectre of big three employment related regulations coming from the UK – when it comes to regulation, nobody does it better than us, and we have a track record on gold(finger) plating.
So in the new BREXIT world what can be done, or undone? If it’s not European legislation can the government, and indeed the new Prime Minister alleviate some of the above with a view to kill some of the burden on business? If not, will businesses look to diversify their investments– after all, diamonds are forever.
Here's our view (to a kill)....
As mentioned above the National Living Wage has not been too onerous on business – they seem to have dodged the bullet to live another day. However, in the now uncertain world of Brexit, there is a great deal of uncertainty about wages and employment. Not knowing the true effects of Brexit, means that the Government should be cautious about pressing ahead with their 60% of median earnings target – and we’ll be blogging more on this later in the month ( for readers’ eyes only!)
Then there’s Gender Pay Reporting. This has not yet been implemented but is some way down the tracks. With revised regulations due to be laid shortly, the timeframe for influencing is relatively short. Now, we don’t know exactly what revisions will be made but we have our fingers (and toes) crossed that it might be a bit more business friendly. If we could drop the proposed “name and shame” league tables that would be a useful start.
And finally…the Apprenticeship Levy. Employers have been anxiously awaiting the funding guidance which was originally due by the end of June, fearing that there may be a sky fall. This date has come and gone and week by week the delays get longer. This is making it even more difficult to plan budgets and recruitment, with an increasing number of employers saying they may simply deter apprentice recruitment until things look a bit clearer.
But even with the funding guidance it is unlikely employers will be able to make the swift decisions needed before the April 2017 date. In fact most of the milestones for budget and recruitment decisions have been and gone and government has to date made an odd job of preparing for the levy, leaving employer’s in desperate need of Moore information. EEF has been vocal about a delay to the levy until it’s fit for purpose and from we’re standing it’s nowhere near ready. So we repeat our calls for a delay and even September 2017 is probably looking a bit too optimistic….