THIS year will see some significant changes for employers. Last year we saw the introduction of the National Living Wage, further cases on holiday pay, the uncertainty created by Brexit and the highly publicised Uber case which called into question the self-employed status of those working in the gig economy. In 2017, we can expect to see more on all these issues. However, we will also see the following key legislative changes for employers.
Gender Pay Gap Reporting?
Gender pay gap reporting regulations are due to come into force on 6 April 2017. Employers with 250 or more employees will be required to publish the difference between the mean and median hourly rate of pay paid to male and female employees; the difference in mean and median bonus paid to male and female employees; the proportions of male and female employees who receive bonuses and the relative proportions of male and female employees in each quartile pay band. Employers must gather gender pay gap information from 5 April 2017 and publish their first reports by 4 April 2018.?
The scope of the reporting obligations extends to the pay of anyone employed under a contract which requires them “personally to do the work’. This would exclude only the genuinely self-employed contractors. Therefore, employers should review contractors, consultants and freelancers to see if they fall within the reporting requirements. In any event, businesses should keep a close eye on such arrangements due to a growing number of “worker status’ cases and the Government’s promised review of the gig economy.
Employers will need to decide what information to publish (i.e. whether to go beyond the regulatory requirements by explaining any pay gaps) and consider any potential equal pay issues and bonus arrangements.
Changes to statutory payments
The National Living Wage for employees aged 25 and over will increase to £7.50 from April 2017, together with increases to other National Minimum Wage rates. The flat rate of statutory pay for maternity, paternity, adoption and shared parental leave will also increase to £140.98 per week from April 2017. Statutory sick pay will increase to £89.35 per week.
The Apprenticeship Levy?
From 6 April 2017, employers with an annual pay bill exceeding £3m will need to pay 0.5% of their NIC pay bill for the tax year on the apprenticeship levy. Employers can then access apprenticeship funding through a new digital apprenticeship service account. The Government will apply a 10 per cent top up to the funds that an employer allocates to apprenticeship training in England. Funds will expire 24 months after they enter the employer’s digital account unless they are spent on apprenticeship training. Employers will need to consider their strategy for employing apprentices and how best to utilise the new funding.
Salary Sacrifice Schemes?
In the Government’s Autumn Statement of 2016 it confirmed that, from April 2017, the only benefits that will continue to receive tax and NI contributions relief under salary sacrifice arrangements are enhanced employer contributions to a registered pension scheme; childcare benefits; cycles and cyclists safety equipment provided under the cycle to work scheme and ultra-low emission cars. Arrangements in place before April 2017 are protected until April 2018 or for cars, accommodation and school fees, until April 2021.?
Data Protection
Looking further ahead, the UK has until May 2018 to adopt the EU?General Data Protection Regulation (GDPR). Even in the unlikely event that we were not in the EU by that time, it is expected that the UK will mirror the GDPR so we can continue to trade and exchange data.? Therefore employers will need to review their data and ensure that they have proper systems and procedures in place to process data, keep it secure and deal with security breaches. Under the GDPR, consent to process personal data will need to be freely given and the handling of “subject access requests” will also change.?The Information Commissioner’s Office has produced some useful guidance entitled “Preparing for the GDPR – 12 steps to take now’. With increased penalties of up to four per cent of global turnover or 20 million Euros it will be vital that during 2017 employers get to grips with the requirements!
And finally? stay informed!
Our employment law team delivers regular events for HR professionals and business managers. We are delighted to be delivering our next employment update seminar at our new offices in Rushmills on 14 March. This is always a popular event so book early to avoid disappointment. You can book through our website (howespercival.com) or by using the details below.
Graham Irons is a Partner at Howes Percival LLP specialising in employment law and can be contacted on 01604 258003 or at
