On The Horizon: 8 Employment Law Changes for 2017

There are a number of employment law developments on the horizon for 2017. Here is a simple summary of what to look out for in the coming months.

Apprenticeship Levy

As of 6 April 2017, employers with a payroll of more than £3 million will be required to pay a 0.5% levy on their salary bill, minus an allowance of £15,000.

Larger organisations will be able to access levied amounts plus a government top up of 10% to fund apprenticeships from accredited training providers.

Smaller organisations will not be required to pay the levy but will be able to access the funding by contributing 10% towards the cost of an apprenticeship with the government paying the remaining costs.

Additional points to note:

• The government will maintain its incentive to hire 16-18 year olds by giving an employer an additional £1,000 towards training costs. Smaller businesses (50 employees or less) will be reimbursed 100% of the costs of training 16-18 year old apprentices.
• The above incentives will also apply to employers hiring 19-24 year old apprentices who have previously been in care or have a Local Authority Education Health and Care plan.
• The government will pay up to an additional £150 each month for extra learning support to employers hiring apprentices with a learning or physical disability.

National Living Wage and National Minimum Wage

New National Living Wage (NLW) and National Minimum Wage (NMW) rates and the alignment of future rate increases will come into effect from the first pay period on or after 1 April 2017. The minimum level of pay for those aged 25 or over will be increased to £7.50 per hour.

Read more on the National Living Wage and National Minimum Wage.

Compensation Limits

In Great Britain, the maximum employment tribunal compensatory award for ‘ordinary’ unfair dismissals will increase to the lesser of £80,541 (from £78,962) or 52 weeks’ gross pay where the ‘relevant date’ is 6 April 2017 or later. The maximum week’s pay for the basic award and for redundancy pay will increase to £489 (from £479), and the daily rate of statutory guarantee pay will increase to £27 (from £26). The equivalent figures for Northern Ireland are yet to be determined.

Gender Pay Gap Reporting

From April 2017, organisations in the private, public or voluntary sector who employ 250 employees or more will be required to publish gender pay gap information. This information needs to be signed off by a Director or equivalent and be published on an accessible Company website and should be retained there for 3 years.

Employers will need to publish information about employee pay, bonus pay and information on the number of men and women in each quartile of the organisational pay distribution. Employers do not need to publish the specific salaries of employees. They only need to publish the differences between men and women – job grade and job type don’t come into it. Employers can include a narrative to the report to explain any of the results.

Click here for more information on Gender Pay Gap Reporting.

In-work Benefits

From 2 April 2017, the basic weekly rate of Statutory Maternity Pay (SMP), Statutory Adoption Pay (SAP), Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (SSPP) will increase from £139.58 to £140.98 (or 90% of a person’s average weekly earnings if lower).

Statutory sick pay will increase from £88.45 to £89.35 (with the lower earnings limit increasing from £112 to £113 per week) from 6 April 2017.

Salary Sacrifices Schemes

Employers who offer benefits through salary sacrifice schemes will need to reconsider these schemes, as a number of salary sacrifice schemes will lose their PAYE/NI advantages from 6 April 2017. Schemes in place before 6 April 2017 will be protected until at least April 2018.

Childcare Payments

In 2017, Employer Supported Childcare will be replaced by new tax free childcare scheme. The government will provide 20% of working families childcare costs, subject to an annual limit of £2,000.

Employment of Foreign Workers

A skills charge of £1,000 per worker will be introduced in April 2017 for employers sponsoring foreign workers with a tier 2 visa.

If you have any questions regarding the topics above, or would like some help with anything HR or Employment Law related, contact us today.